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It’s been over two full years since the Federal Reserve began increasing interest rates in an effort to slow inflation. It’s been over a year (July 26, 2023) since they’ve increased those rates any further. Inflation has slowed and interest rates have held. Housing prices, however, have also held steady and in many areas, continue to rise.
There are so many advantages to investing in rental property.
The prices for everything have increased dramatically across the board and nowhere is that more true than in the housing arena. People might be complaining about the cost of eggs at the grocery store because that is a weekly reminder of inflation, but the problem is much larger when it comes to large lump sum payments that cover a twelve month period.
As previously noted, anti-landlord legislation is in vogue this season. With national, state, and municipal campaign season also kicking into full gear, there are a flurry of attention grabbing bills making headlines these days. In many cities this has taken the form of anti-landlord (or pro-tenant) legislation.
Let’s start a conversation about a debatable issue with a hard fact: The average rent in the U.S. has increased 18% over the last five years. Americans who are unable or opt not to buy a home are being asked to pay more and more for a quality place to live and this is compounded by the fact that more and more Americans fall under this category than ever before.
It’s not even worth beginning with an introduction and overview of how the real estate market is a bit “off” right now. You already know that interest rates are higher than they’ve been in decades and housing prices have not come down in the least. Supply simply is not there and housing market trends are seemingly frozen.
As a rental property owner you understand that your rental income, like all markets, is cyclical. There are times when the engine is humming and you’ve got money coming in without issue. There are times when maintenance issues increase where your profits naturally decrease. And there are those toughest of times when you face vacancies and the potential costs of eviction.
This just in!!! The rental property market is tight…real tight…tight to the point that potential renters are having a hard time finding a place to “overpay” for. Supply is low. Unemployment is low. Interest rates are high. Prices on goods and services are high. Sales and rental prices are high…Simply put, the market is not moving. Just like the pipes in some rental units, the rental landscape is frozen.
If you’re interested in getting into real estate investment, congratulations! We can’t think of a better way to make your money work for you than investing in rental property.