3 Reasons Rental Property Investing Is Getting Stronger Than Ever

If you’ve considered investing in real estate over the past year or so, it may have looked like a bad time to make a rental property purchase. Between nearly nonexistent housing inventory and dramatically inflated prices and construction costs, it’s been a tough market, to say the least.

But while not much has changed in these areas, there are still several reasons why rental property investing is actually getting stronger than ever. Let’s explore a few of those and see why they’re changing some investors’ minds about whether now’s a good time to invest in rental property.

Image Source: Getty Images.

1. Low supply + high costs = no vacancy

As we discussed, the main reasons rental property investors are hesitant to wade into the market right now are low supply and high cost. But those are also great reasons to seriously consider it. That’s because those same barriers are driving would-be homebuyers toward renting in droves. In fact, according to The National Association of Realtors, rental unit vacancies are now at an incredible 25-year low. The fact that vacancy is extremely unlikely to be a problem is a huge deal for would-be landlords.

2. Rent prices are up

So it’s true that getting into the rental game right now is costlier than it has been in even the fairly recent past. But rent is way up, too, and in many areas, it may be up enough to more than compensate for your increased investment. CoreLogic‘s Single-Family Rental Index even revealed in December that US single-family rent growth tripled year over year. See how much properties are renting for in your area before deciding any potential rental properties are too expensive.

3. Proptech is making rental investing easier than ever

A lot of mom-and-pop rental investors want to manage their own properties if they’re going to get into this business at all. Especially in a market like this where you’re unlikely to find a big bargain on a rental property, you may not want to then fork over 10% or more of your rental income to a property manager. But all the moving parts of marketing; finding, screening, and signing on tenants; and then maintaining the property, responding to tenant issues, collecting rent, and handling turnover can be a lot if you have limited time and resources to devote to your investment.

Enter property technology, or proptech. A rapidly growing range of proptech products are making it easier than ever to automate various processes or otherwise take care of property management issues much more quickly and efficiently. From tools like RentSpree, which handles applications, screening, and rent estimation, to platforms like Lessen, which helps landlords easily coordinate with vetted contractors who can get the work they need done, landlords have a lot to gain by being tech savvy right now.

Should you buy a rental property now?

If you’ve been thinking of buying rental property, it’s easy to understand why you might not think right now is a great time. But reduced vacancy concerns, high rent, and easier property management with proptech are all advantages to keep in mind if you’re a would-be landlord flinching at the current high costs and low supply. So if you find a property you think would make a great rental, give these points some serious consideration before passing it up.

Leave a Comment

Your email address will not be published.