RENTAL PROPERTY INVESTING : PROFIT OR LOSS ? Is Central Alabama ’ s residential rental market where the smart money lives ? Get insight on the pros and cons of this real estate investment from locals who are landlords .
I nvesting in rental property can prove lucrative in both the short and long terms and be a valuable tool for building wealth . It pays you passive and recurring monthly income . Plus , down the line , if you made wise choices when buying , you may be able to sell your properties for more ( sometimes much more ) than your purchase price . But , like all investments , it comes with risks , and being a rental property owner has challenges too . We asked Central Alabama real estate pros and successful rental property owners for their thoughts .
RIGHT TIME ?
While the housing market is cooling a bit , both nationally and locally , home prices remain high . But , so do borrowing rates . Raised interest rates are a doubleedged sword for rental property investing . They mean it costs more to buy and own a rental house . On the flip side , high rates also keep others from buying homes , which eventually drives home prices down .
Financial news stalwart Kiplinger also points to good things for rental property investors in the near future , reporting an uptick ( from 3 percent to 12 percent in 2022 ) in new homes being built specifically to be rented .
Times could be changing though ; other numbers
There ’ s an increase in homes being built to be rented .
show rental demand starting to weaken . October 2022 was the third month in a row where rental rates went down , according to a report from Apartments . com . According to Bankrate . com , in 2022 , the profits on singlefamily home rentals fell in 72 percent of the counties in the United States .
The picture at the local level seems a bit rosier . Carol Bowman , a Realtor with Lucretia Cauthen Realty , LLC who ’ s been in River Region real estate for five years , calls the rental market in our area “ strong ” and says it derives its strength mainly from the presence of the Air Force base in Montgomery , as well as the successful recruitment of businesses with jobs that draw newcomers .
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AROUND 34 %
OF HOUSEHOLDS LIVE IN RENTAL HOUSING .
42 % OF THOSE LIVE IN
SINGLE-FAMILY HOMES , WHILE
36 % LIVE IN APARTMENTS
WITH FIVE OR MORE UNITS . ALMOST HALF OF RENTERS ARE UNDER 30 YEARS OLD . SOURCE : BANKRATE . COM
The rental market serves many military families coming to Maxwell- Gunter . - Carol Bowman , Realtor
20 CentrAL Inc !