With the past few years of general uncertainty about the economy, real estate market, and more, real investors may be a bit hesitant to jump on putting money into new ventures.
People may wonder what the future holds between COVID-19, rising inflation, and a shaky job market. As a result, businesses have many questions about how to proceed to be successful. Property investors are in the same position, wondering if they should continue to move forward with their investments as planned.
What will the ROI look like through 2022 and into 2023? They may question whether owning a rental property right now is worth it or not.
It's common to take a step back and do some research about the current economic landscape before moving forward. However, when you know what to do, it's best to act so you don't lose out on potential opportunities. Our Philadelphia property management team can tell you four reasons why owning a rental property in 2022 (and beyond) is worth it.
1. Low Mortgage Rates
Mortgage rates remain fairly low considering the current state of the economy and historical rates that have been much higher. That is good news, according to investment property management companies. Since other factors are creating a drop in housing prices, real estate investors can acquire a decent deal and get still historically-low interest rates.
In the first week of August 2022, the rates for a fixed 30-year-fixed mortgage hovered around 5%, which might seem "high" compared to this time last year. However, looking further back over the past decades, 5% is a remarkably low rate. Chances are these low rates aren't going to last forever, so investing now is a wise place to put your money.
2. Real Estate Does Well During a Recession
With the talk of a recession, some industries are taking a financial hit while others seem more insulated. However, some industries do well during a recession. Fortunately, real estate is one of these industries!
No matter what is happening in the world, people still need a place to sleep and live. Therefore, there will always be a need for homes. So, real estate typically continues to flourish during a recession.
Another issue that can be helpful to a property investor during a recession is that home prices may fluctuate due to a decrease in demand from homeowners. This lower demand can open up opportunities for investors. With the help of a Philadelphia property management team, you can find some good deals to build your portfolio for long-term success.
3. Rentals Are Popular During Economic Instability
We mentioned that demand for home purchases lowers during a recession. Most people don't want to go out and purchase a new home during economic downturns and instability. They may be unsure about what the future holds or whether they will want to stay in the same area long-term. In addition, they may be worried about the value of home prices in the future.
As a result, many people who don't already have a house shift their focus to renting a home instead of buying. In addition, people who are already in a rental will feel more comfortable staying put because of the uncertainty going on around them. This allows property investors to remain successful by providing quality rental housing during this time, even if the overall outlook may seem bleak.
4. Recovery is on the Horizon
Even though the U.S. has been hit with a few curveballs over the past few years, things will turn around. Recovery is on the horizon, and we're already seeing signs of it. It's only a matter of time before the economy catches up and begins to boom again.
Property investors who take advantage of the low-interest rates, purchasing opportunities, and people's interest in renting will be one step ahead when recovery hits. Investors in real estate will have a locked-in interest rate and can increase rental rates as the economy recovers.
If you've been unsure that owning rental properties is a good idea right now or looking into 2023, our Philadelphia property managers are confident that it is a smart way to invest and build long-term income!
Work With a Philadelphia Investment Property Management Company to Maximize Returns
"Onwing" properties won't put more money in your pocket without managing them properly. Take advantage of the opportunities for rental real estate investing by getting in touch with a property manager in Philadelphia! Just search for property management companies near me and reach out to Rentwell.
We are a top management company to guide you through economic challenges and market uncertainty while helping you reach your financial goals. We offer full-service property management, including taking care of lease signings, tenant screenings, rent collection, and much more. Reach out to our team to learn more about how our property management services can help you capitalize on owning rental properties today!
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