Everyone wants a solid and reliable investment, which can be tricky at times. According to an article from US News, many people have turned to investing in real estate instead, specifically single-family homes to use as rentals. Why, you ask? According to US News, the answer is volatility.
A Never-Ending Need
People will always need a place to live. This means that if you own a rental property in Colorado Springs or anywhere else, your investment will always be in demand. Unlike equity investments, investing in real estate offers a much more stable investment. Why? Because the rental market doesn’t fluctuate in a volatile market. It doesn’t swing drastically as stock prices shift, and according to the article “. . . can outperform the Dow and S&P 500.” And the longer you hold onto your rental and continue to invest in it, the higher return you could potentially see.
3 Reasons To Invest In Single-Family Homes
US News gave 3 reasons to invest in single-family homes: 1)A strong market going into 2019; 2) housing’s link to low unemployment; and 3) renting is shifting to the norm for many looking to fulfill their housing needs.
Demand for rental housing is still high, especially in the single-family home market. And while rent increases may have slowed down from a few years past, it’s still in an upward trend. Investment-wise, the rental market is set up to potentially “out-perform stocks in 2019” which may not do so well with talk of a potential recession and a slowdown in economic growth.
Secondly, the rental market goes hand in hand with low unemployment and high interest rates. If unemployment remains low, rental prices can potentially increase as people are better able to afford housing. And if interest rates on mortgages continue to increase, those unable to afford to buy a home have only one option: to rent. This, too, increases demand which can lead to increased rental rates.
Finally, renting is quickly becoming the norm. With the vast majority of the adult population shifting from Baby Boomers to Millennials, favor moves away from home-ownership and towards renting. Millennials aren’t as interested in buying, preferring the ability to up and more rather than be tied down. At the same time, not all Millennials seek apartments and are searching for single-family homes to rent instead. The article also names two other renter profiles that are rising: Baby Boomers looking to downsize and choose to rent instead and those who can’t afford to buy.
Hold On To Your Colorado Springs Rental!
Owning a reliable and stable investment is a great way to earn additional income. Investing in real estate not only provides that but will likely continue to do so as years progress. With that said, it makes sense to invest in the single-family home rental market!