Four Trends in Investment Properties

Spotting investment property trends is the key to capitalizing on changing markets and obtaining the best return on your money possible. Over the last few years, a number of developments have represented a sea change in real estate investing in the United States. Below you'll find some tips regarding what trends you should look for when considering your next investment property decision.

A Shift Towards Inland Markets

Although housing prices continue to grow in the country's most expensive cities, such as New York or San Francisco, there has been a notable shift of the middle-class towards affordable housing in areas of the country where it still exists, making “inland” cities the fastest growing in the entire country.

Oklahoma City, now the 8th fastest growing city in the United States, offers just one example of this trend. Young people are moving there, forsaking coastal cities that offer rents that are too high, while facing an inability to obtain mortgages. El Paso and San Antonio, Texas; Little Rock, Arkansas; and Knoxville, Tennessee are all cities that mirror this overall trend.  

People are moving to these cities looking for a bargain, as well as the stable employment opportunities these cities provide. Issues such as crime, educational standards and quality of life are all important factors. If you're seeking investment properties, identify areas that are in the process of revitalization in “inland” cities, and you may see better potential returns on your real estate portfolio.

Single-Family Rentals

Given the rise in families and people renting single-family homes, renters are more often dealing with smaller rental companies or landlords. Although there was a surge of multi-family home construction during the last housing boom, renters are increasingly turning to single-family rental homes due to the quiet and extra space they bring.

Often these single-family homes are owned by a landlord with only a few investment properties, meaning tenants can expect to deal with their landlord on a one-on-one basis. The growth in single-family renters also coincides with the decrease in home ownership, which has generally been on a downward trend since the 2009 financial crisis made it increasingly difficult for people to buy homes.  

Census data has also demonstrated that the suburban market, which features far more single-family homes as a percentage of the market than urban markets, has seen significant growth in 2013. In addition, the National Association of Homebuilders has indicated that 5.8 percent of new single-family houses are being built as rentals compared to only 2 percent in 2006.

The Impact of Financing Rates

Property investors are finding that low financing rates allow them to enter the rental property market and realize strong returns if they invest in the right areas. Interest rates are low and credit is often cheap in many cases. This not only means that investors have access to capital at a low rate, but that the market also remains tight due to investors who already snatched up some of the most distressed housing for investment purposes.

However, this has raised additional concerns that easy money will lead to another property market boom and bust. Despite fears, there are signs that the real estate market is making a slow but steady recovery, with little signs of the mania fueling the property market bubble of the 2000s.

Investing Around Sectors

Property investors are increasingly looking at the employment sectors surrounding a city to determine whether investing there is a safe decision. Healthcare, government, and education are seen as stable choices, while cities that were more reliant on finance and construction are seen as less reliable choices.

This reflects the strong growth of cities like Raleigh-Durham in North Carolina, which has a vibrant education and medical sector, and cities like Alexandria in Virginia that are surrounded by government contractors and employers. These areas are expected to remain strong well into this decade.

Posted on Dec 04, 2014


The Landlord Tenant Board: What it is and When it is Needed

Many times, there are issues between a landlord and a tenant that need to be resolved but are failed to do so, because both parties have gone too far with their actions, and have retaliated in the... More

How to Create a Residential Lease Agreement

Where there is a landlord, there will also be a tenant, and it is no surprise that these two parties can only work together once there is some sort of agreement, contract or a binding deal in place.... More

The Best Sites for Rental and Lease Agreement Templates

Many landlords find it difficult to write and draft a lease agreement. Since every State has its own general template, it can also be difficult to make sure your lease agreement meets all the criteria... More

The Best Landlord Associations for Landlords to Join

If you’re a landlord and want to manage your business in a better way, you should endeavor to get in touch with those industry experts who have the experience and the skills to help you do it. This is... More

Unpaid Rent

When you talk about the most common disputes arising between landlords and tenants, nonpayment of rent has to be there in the list. People rent their properties to earn money, and when a tenant... More

Section 8 Landlord Pros and Cons

If you have ever rented a living space and have had to move many times, you’d already know how difficult it is to find decent, affordable and secure living premises. A person has to deal with the same... More

Landlord Inspection Checklist: Rights, Letters, and Reports

Landlords across the state have the prime responsibility to make sure they inspect and up keep their property once they have rented it to the tenants. Inspections can occur monthly or yearly depending... More

Landlord Maintenance Costs and Responsibilities

Everyone knows that a landlord’s job is not easy. These folks have specific duties and responsibilities that they must perform in order to be fair. Being a landlord is not a position but it is, in... More

When to Withhold Tenant Security Deposit

Asking for a security deposit is quite common in property dealings. The reason to ask for a security deposit is to have something that would help a property owner recover some of their financial... More

How to Report Bad Tenants

Bad tenants are the worst-case scenario for any landlord; no one wants them, and if someone has them, they want them out in any way possible. There are times when landlords try as much as they can to... More