fbpx
Rising Rents – Music to Your Ears?
Rents going up may not be pleasant to hear for tenants, but it could be music to your ears if you are an investor. The recent CoreLogic Single-Family Rent Index, April 2021, showed a 5.3% increase in national rent year over year which doubled the increase experienced in April 2020. This is the largest annual […]
Rising Rents – Music to Your Ears?
Rents going up may not be pleasant to hear for tenants, but it could be music to your ears if you are an investor. The recent CoreLogic Single-Family Rent Index, April 2021, showed a 5.3% increase in national rent year over year which doubled the increase experienced in April 2020. This is the largest annual […]

4Ek1xcSqm0Czhq6NYOxtxQ.jpg

Rents going up may not be pleasant to hear for tenants, but it could be music to your ears if you are an investor.

The recent CoreLogic Single-Family Rent Index, April 2021, showed a 5.3% increase in national rent year over year which doubled the increase experienced in April 2020. This is the largest annual rent price increase in nearly 15 years.

Interestingly, detached rentals are experiencing an even higher growth rate of 7.9% year over year compared to the 2.2% annual rate for attached rentals. This is supported by the CoreLogic report that half of millennials and 2/3 of baby boomers “strongly prefer to live in a single, stand-alone home.”

From an investor’s point of view, single-family rentals offer large loan-to-value mortgages at fixed interest rated for long terms on appreciating assets with definite tax advantages and reasonable control.

Rentals are considered to be the IDEAL investment because if offers income to offset the carrying cost of the investment; depreciation contributing to annual cash flows with a non-cash deduction; equity build-up because a portion of each payment is applied to principal reduction; appreciation with increases in value; and, leverage that increases the overall yield through the use of borrowed funds.

Most homeowners are very aware of the housing inventory shortage that has caused homes to rise over 12% in the past year. The increased demand for homes coupled with the shortage of supply has contributed to the rapid appreciation. The trend is expected to continue for years.

While appreciation is a large component to the rate of return, cash flows are bolstered by the increasing rents. This combination makes investments in single-family rentals very attractive.

An added appeal is the familiarity and understanding of this type of investment because it requires the same aspects as homeownership. The same service providers a person uses for their home can be used for the rentals. For the investors who don’t want to manage the property themselves, professional management is available for placing and qualifying a tenant only or the entire process including collecting the rent and maintenance.

For more information, download the Rental Income Properties. Contact me if you’d like to have a more in-depth conversation and address any personal questions you might have.

LIST OF BLOGS

Which types of showings work

A showing is an opportunity for a buyer to determine if a home is right for them. Each of the different types of showing plays a valid and necessary role in marketing the home. Some buyers may start by looking at homes online, which can lead them to drive by the home...

How homeowners can avoid mortgage relief scams

Homeowners who are facing financial difficulty are often targeted by mortgage relief scams. These scams can be very convincing, and homeowners may be desperate for help, making them vulnerable to these schemes. Scammers often pose as government officials or mortgage...

Discover the benefits of an FHA Assumption

With new mortgage rates approaching 8%, many buyers have decided to wait for rates to come down. While there may be some easing in the fourth quarter of 2023 and 2024, assuming an existing FHA mortgage with a lower rate made in the last three or four years might be a...

Discover how to go from stress to success with your home move

Navigating a real estate transaction, which often involves substantial financial investments and emotional considerations, can understandably induce stress. To streamline this process, adopt these effective strategies that promote a smoother journey. Begin by clearly...

The Net Worth Advantage: Homeowners vs. Renters

The decision to rent or own a home is not just about having a place to live; it also has significant implications for your financial future. One key aspect that often comes into play is net worth ... the value of your assets minus your liabilities. Numerous studies...

The Danger of Do-It-Yourself Divorce

Ken & Barbie have been married 20 years and have owned their current home for over 10 years. Without the benefit of legal or tax advice, they decide to divorce with Ken taking his retirement and Barbie taking the equity in the home which are equal in value. It...

Exploring Down Payment Sources for First-Time Homebuyers

Aspiring homeowners can overcome the challenge of saving for a down payment by taking advantage of various sources of assistance. Discover a variety of down payment sources available to first-time homebuyers, from family gifts and retirement account withdrawals to tax...

Your Referrals Mean the World to Us

Referrals are the lifeblood of any business, and real estate is no exception. When someone you trust refers you to a service provider, you're more likely to do business with them because you know that they've been vetted by someone you know and trust. That's why we're...

Awareness is Key to Safeguarding Against Scams

When it comes to safeguarding against scams, awareness is key. By being vigilant and recognizing consistent red flags, you can effectively thwart scammers in their tracks. Stay one step ahead and keep an eye out for these warning signs to protect yourself from falling...

How to Buy Your First Home as an Investment and Retire Rich

As young people enter the full-time workforce and begin to think about living on their own, it may not seem practical or wise to consider buying a home. However, it may be a pivotal decision for your financial security and future retirement. Rents are going to...

RECENT POSTS

ABOUT  TWENTY
THREE HOMES

The Twenty Three Homes are one of the premiere real estate groups locally, nationally and internationally, specifically dealing with high-end properties and exclusive clientele. Partner with Keller Williams Twenty Three Homes are full service real estate experts whose clients benefit from the custom tailored, hands on service while receiving all the exclusive amenities and resources of one of the most established and respected firms in the business.

GET IN TOUCH