This year is shaping up to be a particularly good time for real estate investment. Explore four reasons why
While many say real estate is always a good investment as long as it is the right property in the right location, timing can be everything when buying a home. This is also true when investing in real estate other than your primary residence. And 2019 is shaping up to be a great year to get into the real estate investment game. Here are a few reasons why.
For some time, the U.S. housing market nationwide has largely favored sellers. With encouraging economic conditions — low unemployment, favorable mortgage rates, and higher wages — more people are in a position to buy. This had led to more first-time buyers entering the market,which has resulted in fewer available properties. However, over the last few months, price growth has begun to slow and inventory is increasing, albeit slightly, pushing the real estate market in buyers’ favor in many cities in 2019. With this shift, there couldn’t be a better time to invest in real estate.
Demand for housing
When deciding on what geographical areas to invest in, real estate investors typically look for three characteristics: job growth, population growth, and affordability. In markets with these three factors, there are excellent opportunities for investment. Demand for housing in these markets is usually strong for both renters and buyers, which makes for a sound return on investment. Orlando, Tampa, Jacksonville, Pittsburgh, and Houston are all examples of attractive real estate investment markets. Values in these areas tend to swing upwards over time as more people look to call it home, and this trend is expected to continue through 2019.
Rental Cash Flow
When demand for housing is up, demand for rentals rises as well. Appealing living conditions in up-and-coming cities appeal to younger residents, who typically prefer renting to buying. This presents high cash flow potential for lower priced homes. With more home seekers looking to rent, rates have skyrocketed in recent years and are projected to keep growing in 2019.
While investing in real estate can result in sizable income, it is income that keeps pace with inflation thanks to the relationship between economic growth and the demand for real estate. Over time, inflation can increase the value of real estate, something that does not apply to other types of investments, such as stocks and bonds. Inflationary costs can be passed on to tenants, which helps the property appreciate without burdening the owner.
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