As real estate proved to be one of the only sectors that managed to thrive during the pandemic, combined with ultra-low mortgage rates, investing in a rental property is paying off for many investors. Some have even eyed foreclosures, snagging them at rock-bottom prices and turning them into rentals.
Or maybe you’re thinking about your rental in a non-conventional way. As we’re all itching to travel again, you may choose to use your rental as an Airbnb property.
No matter which school of thought, 2021 looks like a great year to consider purchasing a rental property even with prices on homes moving up. “With a vaccine now curtailing the virus and Gen Z continuing to graduate from college, we expect the cloud of uncertainty surrounding the pandemic to lift and demand for rental units to surge in 2021,” said Zillow senior economist Chris Glynn.
In earning a profit on a rental investment, many experts use a formula: Charges 15 percent above monthly mortgage and maintenance costs. But it’s also important to know what comparable apartments are going for and be flexible if you’re unable to find a tenant for months, experts note.
The best investments for rentals typically prove to be in areas with a strong history of rental demand, such as neighborhoods near universities or homes in residential areas near schools to attract families.
Reach out, if you’d like to learn more about what to think about when considering a rental property.