Maybe it seems like you have to be an adrenaline junkie in order to benefit from the current real estate investment market. Prices are high, inventory is low, interest rates are throwing shade, and it seems like an uphill battle.
When we’re asked if this is a good time to invest, however, we always say yes.
Not because we thrill for adventure but because there is value in real estate, especially when you invest strategically and commit to holding your property for the long term. Is this a good time to buy and flip a distressed home? Probably not. But, if your investment goals include a buy and hold strategy that prioritizes long term appreciation over immediate cash flow, you have a lot to gain right now.
Here’s why it’s always a good time to buy investment properties.
Strong Rental Markets in King and Snohomish Counties
One of the best reasons to invest now is that the rental markets are just as competitive and squeezed as the sales market. There are a lot of well-qualified tenants looking for rental homes, and those homes are increasingly hard to find. If you can offer a property that’s attractive, well-maintained, and in a desirable location, you’re going to have a pool of tenants wanting to rent it.
More and more would-be homebuyers are feeling priced out of the market, which means there’s a larger pool of tenants. A lot of investors who were renting out homes, especially single-family homes, have sold their properties over the last year. This has created a huge demand for rental housing.
That translates to an opportunity for you.
Rental Prices Are Trending Up
Rents are pretty high, and that’s good news for anyone collecting those rents. In many cases, rent has risen by more than 10 percent. This will impact the rent you set on a vacant property that’s new to the market and it will also impact rental increases at renewal time. The higher rents and lower inventory has led to higher tenant retention rates. Residents know they’ll spend more renting a new place. They are more likely to stay in the homes they currently rent.
If you’re worried about what you’ll spend on an investment property, take some time with your calculations. You’ll see that even while you pay more now, you’re also earning more. The rental income is consistent and recurring and not likely to decrease anytime soon. And, your property will continue appreciating in value, leaving you with an asset that your tenants have helped you pay for.
Leverage for Your Investment Portfolio
Another great reason to invest now is that you can diversify and strengthen your entire investment portfolio. Maybe you want to grow what your portfolio is worth. Or, perhaps you want to branch into other types of investment classes. If you own mostly single-family homes, for example, this is an excellent time to invest in a duplex, a new construction condo, or even a small apartment building. Markets like this require creative thinking and risk taking.
Remember that there are general perks to real estate investing that hold true in any market. You earn consistent rental income. You hold an asset that grows in value. You lean on tenants to contribute towards your mortgage and other expenses. And, you can enjoy tax benefits on the losses and expenses you incur with your property.
If you’d like to talk further about how to invest successfully in the current real estate market, we’d be happy to discuss your options. Please contact us at Real Estate Gladiators. We serve owners and investors in Monroe, Issaquah, Bellevue, Everett, Lake Stevens, Kirkland and other cities in and around King and Snohomish counties in Washington State.