Is Now The Time To Buy Cheap Real Estate For Rentals?
The housing market rides a little like a roller coaster at times and we seem to be starting another slow but steady climb to another peak. The peak is a long way off yet, but prices do seem to be creeping. Some interesting survey results recently may excite some investors – if it doesn’t, perhaps it should.
Hitwise is reporting an increase in both home buying and rental search terms. Home buying internet search increased by 32 percent while rental searches increased by a whopping 171 percent. We are in a perfect market for landlords right now. It is a buyers market when it comes to buying real estate and a landlords market when it comes to rental accommodation.
When faced with this sort of situation, anyone with spare cash and a willingness to become a landlord (and that’s not as easy as it sounds, see our post – Can’t Sell? Think Twice Before Becoming A Landlord In D.C.) should be acting now and grabbing real estate while it is cheap and while the demand for rentals is high. You will need to do plenty of research first so you can target the right areas. Let’s face it, it is pointless buying a cheap house in a particular area if there is little demand for rental accommodation in that area.
If you have a decent deposit you can often find that rentals will pay the cost of borrowing money. When the market peaks at some time in the future, you then have the choice of selling and taking a profit, or keeping the property as a longer term investment. Smart investors are buying when markets slump and steadily building a portfolio of properties that are generally paying their own way. In fact, the equity in one property can often be used to support the purchase of subsequent properties. If you willing to go through some of the loops to become a landlord, buying real estate now could be a smart decision.
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