Rents are Paying Off for Investors

The demand for rental properties and the cost of monthly rents are continuing to sky rocket, something that’s allowing investors to cash in big time, reports RISMedia. Rents have risen by 5.17% this year compared with 4.72% the year before, and so long as rents continue to grow, analysts say it won’t be long before we get close to the all-time record of 6.18% for rent increases, which happened in 2000.

Axiometrics Inc., said that almost 1.4 million renters have joined the rental market over the last 12 months, many of whom used to be homeowners before they were forced into foreclosure or a short sale. They also said that renters are showing a much greater interest in single-family homes this year, many of which are owned by investors.

As expected, the number of investors jumping into the rental market is also growing. RISMedia said that according to the latest home sale data, anywhere between 20% and 40% of existing homes sales involve investors, and with interest rates and prices at super-low levels, more and more wannabe investors are jumping into real estate.

In fact, there are so many new real estate investors these days that one recent survey conducted by Realtor.com revealed that nearly 60% of them are new to investing in real estate.

Greg Rand, the CEO of OwnAmerican, pointed out that investors should remember that real estate investments are for the long term.

“Rents will get you a steady return on your investment over many, many years, and you’ll be left with a very attractive asset when prices finally pick up again, as they surely will,” he said.

“Those investors who enter this with a long-term outlook are sure to accrue good profits.”