A recent survey found that, over the last decade, the number of homes occupied by renters has gone up nearly 34%. Good news for landlords – great news for those looking for a long-term investment (10 years or more) and who have ever thought about becoming a landlord.
The good news doesn’t stop there. In 2010, average rental rates jumped a whopping 12% year-over-year. This trend doesn’t show any sign of leveling off as demand continues to rise and vacancies remain at record lows as more renters flood the market searching for rentals.
For owners of multiple properties or empty-nesters looking to downsize, the opportunity couldn’t be clearer. Mortgage rates remain at historic lows, making this one of the best times for prospective real estate investors to enter the market – as a landlord.
When seeking out an investment property, experts advise sticking close to home. Investors are also cautioned to avoid properties with more than four units due to steep borrowing standards. Look for a property where the rental income will provide a 20% cushion. That will help cover repairs, the cost of property management, and potential vacancy between tenants.
A rental property can be an excellent addition to your long-term investment portfolio. With a little research and attention, it can also provide owners with an additional source of income while remaining low-risk.