2017 is off to an excellent start with rent prices remaining quite high across the country. According to reports from ApartmentList.com, in November 2016, rent prices were actually 1.5% higher than rent prices in December 2015 with the national averages being $1,100 for a 1-bedroom and $1,250 for a 2-bedroom unit. In California rent prices remain high with San Francisco, Los Angeles, and San Jose making the Top 10 Cities with the Highest Rents List and San Bernardino coming in #10 on the 10 Cities with the Fastest Growing Rents List.
With these numbers looking so good, buy and hold investors have an opportunity to make great returns on their investments this year. In order to help these investors, we’ve compiled a list of 3 strategies for those pursuing rental real estate investing in 2017:
- Our first tip to buy and hold investors is to work with a real estate agent that is aggressive and understands your financial goals. In 2016, prices were on the rise for single home residences across the country. In fact, we saw roughly a 61% increase in home prices. While prices are not predicted to rise as substantially in 2017, they are still going up. Inventory is also at a low. With these two factors at play, it’s important that you have a realtor on your side who is actively looking for property opportunities for you and is willing to help you get a decent sale price too.
- Keep your cash flow in mind. When you own a rental property, you not only need to cover the mortgage every month, you also need to cover your insurance, taxes, and repairs. You’ll also want additional funds on-hand should your property remain vacant for a month or more. Since rent prices are still high and rentals are in demand, this really should not be a problem for most investors, but always be realistic and do your due diligence to ensure positive cash flow every month.
- Right now, mortgage rates are volatile and they are going up. A traditional bank loan will not be your best option when it comes to financing your buy and hold property. Instead, we encourage you to work with a private money lender like ZINC Financial. Not only do we offer very competitive rates on our buy and hold loan programs, we also provide expert guidance and impeccable service to every investor that we partner with.
If you’d like to receive more information on buy and hold strategies you should consider this year or have questions about our loan programs, give our team a call at (559) 326-2509 today.