Top Reasons To Invest In Single And Small Family Rentals
August 26, 2020
The investment landscape continues to change, allowing for new opportunities in the rental property industry. According to CIVIC Financial, the benefits of small and single-family rentals are offered to investors across the country. This market has seen a national average increase of 2.8 percent since 1985. Top markets, such as Phoenix and Tampa, are seeing increases from 12 percent to 13 percent. Small and single-family rental returns are comparable to stock investments but with far less volatility. They outperform the bond market while remaining a steady rental asset class.
Local markets are also benefiting from these newly created dynamic opportunities. Smaller markets are seeing newly created pockets of job growth. That being said, the larger markets are heating up as rentals become a more significant source of income for the most enthusiastic and well-prepared investors. But, what’s the cause behind these shifts in the market?
One reason for these shifts in the market is because, according to Realtor.com, the cost of owning a home has outpaced the cost of renting. The cost of owning a residence is up 14 percent in July 2018, while the cost of renting for the same period rose only 4 percent. Even more telling, only 35 percent of the nation’s counties saw buying as a cheaper option than renting.
This really illustrates how tricky it is to know when to invest in real estate. The best time to buy is when prices are low, ideally. However, the sooner you get in, the sooner you can enjoy the cash flow of your investment. The small and single-family renter market has many opportunities to grow in the future. The renter market represents 16 million households with a projected increase of 13 million by 2030. It’s predicted that renter households will outpace owner households by 4 million in 2030. With small and single-family rental properties, anyone can grow their investment profile.