Two months ago, I sold 2 Bitcoins.
I’m sitting on a lot more cash then I feel comfortable with. I am looking for ways to put this money to work.
One of the options is for Jules and I to finally start building a portfolio of rental properties. I’ve been doing some research and I’ve discovered some obvious, but important openings that I think could be helpful to you as well.
Here are three trends to take note of in the coming months and years.
1. People Are More Motivated to Rent than Ever
The New York Times recently published an article on recent prices of rent vs homebuying. There is a new population wave of people heading to second tier cities such as Nashville, Columbus, and Miami.
Home owners are still trying to fill the vacancies in rental properties they already have, which has been driving the price of rent down. More and more young people are renting.
The catch here is that the rent market is going to quickly rebound. So it should be easy to fill your rental property with tenants now, and the price of your rent will rebalance of the next 12 months.
We’re in a gentle market that allows property owners to ease into the market with attractive rent offers and establish themselves for success in the future.
2. Mortgage Rates are at Record Lows
The mortgage rates for 30 year mortgages and 20 year mortgages is very low.
If you see an opportunity to snatch a property, you can leverage the bank with more buying power than in years past. Inflation scares have not yet affected mortgages. It is doubtful that the mortgage rates will spike. In fact, the markets will probably be more liquid in the next 10 years than the last 10 years.
If you see an opportunity, you can buy that property with cheap capital. Now is the time to strike.
3. Real Estate Hedges Against Inflation
If we do start to see inflation in the US (and global) economy, real estate is one of the best ways to protect against that inflation, because the value of your house will rise with the markets.
In a perfect world, you are purchasing an asset that has positive cashflow (rent payments) and is increasing in value with the rising tide of the markets.
Buying rental properties is more attractive then ever. There is so much money floating in our system right now and there is most likely a time limit on this opportunity.