With the residential real estate market in its present state of low inventory and high selling prices, many people are turning to renting as an option. This shift in housing makes it a great time to consider investing in a rental home. Or perhaps you already have a second residence that you're interested in renting out. There's no better time than now.
Low Interest Rates
Interest rates currently hover around 3%, and they're expected to remain that low for the time being. That gives you a degree of financial leverage in seeking out a second residence to purchase and convert into a rental property. It doesn't have to be a single-family house, either; keep an eye out for condos and townhomes for sale. These smaller residences may even have less expensive upkeep costs.
Rental Rates and Demand are High
Because demand for rentals has reached new heights due to a larger number of people seeking to rent rather than buy a house, prospective tenants are quick to pounce on any new rental property that becomes available.
Demand isn't the only thing spiking right now, though. Rent has surged 17% on newly signed leases in July 2021 compared to what the prior tenant paid according to RealPage.
With surging demand and rent costs, now is a great time to consider investing with a rental property. Pair your investment with management services from a team like Watson Property Management and collecting rent will be even easier.
Another great benefit of investing in a rental property is being able to write off certain costs during tax season. Some common deductions include ordinary and necessary expenses like interest, advertising, maintenance, utilities, and insurance. You may also deduct the cost of certain materials and repairs done to keep your rental property in good operating condition. Improvements to the property cannot be deducted, however.
Investing in a rental property is one of the best ways to build real wealth. It won't come overnight, of course, but as long as you're diligent about upkeep, continue to gain knowledge, and approach the situation professionally, you'll be on your way to building a reliable source of wealth.
Interested in investing in a rental property? Are you looking to finally convert your second residence into a rental property? Contact Watson Property Management and let our experts help you!