With the uncertainty in the real estate market today, many business owners and investors may wonder what move to make next to optimize ROI on their rental properties. They may be wondering if they should continue to invest in more rentals, sell what they have, or do nothing.
Is owning rental property in 2022 worth it? The best property management Cache Valley offers has insights that can help you maximize returns this year and in the future.
5 Reasons Why Owning Rental Property In 2022 Is Worth It
Real estate investors must consider whether a particular property will be lucrative to purchase and keep as a rental property long-term. Having help from a professional property management company makes this process easier. However, with the economic and COVID concerns in 2022, investors may wonder if they should pause rental property investments altogether.
However, these five reasons convince us that operating rental properties is still one of the best ways to build wealth.
1. Low Mortgage Rates (For Now)
You might read that and think we've missed the memo that interest rates continue going up in 2022. However, mortgage rates are still relatively low if you look at them from a historical perspective.
When looking at rates with a long-term strategy in mind for rental properties, they have steadily decreased over the last three decades. In fact, rates are still below the average of 7.7% and have been for several years. So even if the rates rise a bit, it's likely to stay below this average.
So if you're thinking of buying a new rental property, property management companies will tell you that 2022 is still a great time to do it. It's beneficial to lock into a low rate now in case it rises any higher.
2. The Market Is In Recovery
The real estate market did take a bit of a hit with the pandemic, but it's recovering. While the recovery has been slow, it is getting back on track. This means you may be able to take advantage of opportunities now that wouldn't otherwise exist. At the same time, you'll also be getting good rates.
3. More Renters and High Housing Prices
According to census predictions, the rental market will have low rental vacancy rates through 2022. If you've been paying attention, you've probably already noticed the cost of houses rising. Since home purchase prices have skyrocketed, many more people are choosing to rent homes instead of becoming homeowners.
A property manager can tell you that if you can negotiate a good price on a new property, you shouldn't have any issues finding tenants. These lower vacancies can spur the market and generate interest and high demand for rental properties in Cache Valley, UT. In addition, with the supply low, the cost of rentals may increase. If you have real estate investments, it's an excellent time to generate a decent return on the investment.
4. Rental Properties are Inflation-Resistant
There is plenty of talk of inflation continuing to rise, stoking fear in consumers. Americans and business owners don't know what to expect and how their pocketbooks will be affected. However, there is some consolation for real estate investors who deal in rental properties. This type of investing strategy means owning real assets that are protected from inflation.
Rental properties will still appreciate in real value during periods of inflation, and debt will depreciate in real value. So, you earn approximately 50% return on equity if you have a fixed-rate mortgage. This is exponential equity value growth.
5. Real Estate Industry Is More Recession-Proof
You probably know by now that some economists are predicting a recession later in 2022 or 2023. Since inflation is high and unemployment is below 4%, the conditions are there for a recession. Historically, these two conditions were often predictors of a recession on the horizon. However, not all industries fare as poorly in these conditions.
People always need housing no matter what's going on in the world. So, real estate investors who invest their money in rental properties can count on a profitable business even in the worst economic conditions.
Real Estate Is Always Adapting
If there's one thing investors learned during the pandemic, it's that real estate can adapt. Through the COVID pandemic, realtors, renters, and professional property management teams discovered new ways to get things done.
For example, one method that took off was the virtual showcasing of homes. Since people were locked down during COVID, they often viewed new properties virtually. This trend hasn't changed, and many property managers and owners still provide virtual showings as a convenience to potential renters. This shows that even when real estate conditions are challenging, the right property management company will find solutions to adapt and keep your properties occupied and profitable!
Boost ROIs in 2022 With the Best Property Management Cache Valley Offers!
Make the best of this year and your real estate investing future by capitalizing on rental property opportunities. To maximize returns no matter the market conditions, get help from a professional property management company like Reeder Asset Management. Most property owners know that paying reasonable property management fees to the right experts is worthwhile when rental properties continue to do well, no matter the market conditions.
Reach out soon to learn more about how our property management services can help make every rental property worth it!
Learn more about your ROIs with our free Rental Property Calculator!