t is a great time to buy rental properties in Hampton Roads. Buying rental properties is still a legitimate means to grow your investment portfolio. Here are a few reasons why it is an ideal time to buy property in general and, more specifically, as an investment.
It’s a good time to buy property. Rates and property prices are generally low right now, which means you can get a great mortgage rate and a good price on a property you like.
Your expenses are offset in several ways. By buying a property and renting it out, your tenants will be covering a large portion of the costs you incur. Over time, rents will increase as you pay off the mortgage, leaving more income as profit. In addition, you’ll benefit from tax breaks and incentives on your depreciation and expenses. Contact your tax professional for more information.
Appreciation works in your favor. Your investment will be appreciating on the entire value of the property. If you put 20% down on a $200,000 property, you may be paying 4% interest on the 80% you borrow, but a 3% appreciation on the value of the property is on the entire $200,000, not just the $40,000 you put down. Compare that to your return on an investment in the stock market.
Diversify your investment portfolio. Remember that by spreading out your investments, you’re more likely to realize the benefits of a changing economy.
You can invest in your retirement. If your $200,000 investment appreciates 3% per year for the next 20 years, just think of what you can do with the money when you sell the property upon your retirement. Or perhaps you bought a property you would want to retire to.
Source: Movement Mortgage
Here are a few more tips to keep in mind. Before buying a home in a development, make sure the restrictive covenants allow rentals. Also, make a plan with a goal. By stating a plan and criteria, you can hold yourself accountable to your goals. Being a landlord can be stressful for many people. However, the benefits of investing in property outweigh the negatives for many and the stress can be relieved by hiring someone to manage the property.
Contact me, Jennifer Smith, at Today Homes Realty. We can work together to find the best investment property for you.