Why is NOW the Best Time to Invest in Rental Properties?
Author: Hans Anderson // Category: Real Estate InvestingIn today’s economy you would have to ask yourself, “Why would I buy anything?” let alone a rental property?
You may be thinking that the banks aren’t lending, people aren’t spending, so why is now the best time to own rental property? Why? Because the market for rental property is in demand more now then it has been in a long time and it’s just the beginning.
Homes are being lost at record rates. Good people who have fallen upon bad times are losing their homes because of adjustable mortgages, declining home values, reduced income, etc.
A friend of mine recently told me that her husband, who works for the city, is having his pay reduced to minimum wage for an indefinite period of time. Can you believe it? From $30/hr to less than $9. They won’t be able to pay their mortgage if it continues for more than a few months.
Another friend of mine’s wife was just laid off and now they are a one-income household and can no longer afford their mortgage so they too will now have to rent. And then there are the hundreds, maybe thousands of homeowners who are just walking away from their homes because they are so far upside down.
The fact is that because of these tough economic times the rental market is in very high demand and is doing very well.
It gets even better. In good economic times when home values are much higher, it’s almost impossible to purchase a rental property and realize positive cash flow right away. However, today homes values are down but not rents. In fact, in most areas rents are up. In addition, you can buy a distressed property, a pre-foreclosure or REO, at 30% – 50% below market value making your making your monthly mortgage payment (PITI) $500 or more less that what you can collect in rent on that property. What that means to you is instant cash flow. Sweet!!!
Finally, there are tenants everywhere just looking for a place to rent. The same good people that lost their homes to foreclosure make excellent tenants. They appreciate the value of being able to live in a nice home in a nice area. They are even more appreciative of being given a second chance and they will reward you by being good, long lasting tenants.
So I hope you can see why now is the best time ever to buy rental property. It will bring very nice monthly residual income and long-term financial growth, plus the satisfaction of knowing that you are making a positive difference in others lives.
