We talk a lot about the advantages and benefits of real estate investing. Buy investment properties today and make money tomorrow, right?
More seasoned real estate investors might roll their eyes at the sentiment, but in the current housing market, those same real estate investors are buying up investment properties. Investment properties are flying off the market.
Whenever a ton of real estate investors are making moves in the current housing market like the ones we are witnessing right now in the spring of 2018, you should know it is the best time to buy a house for real estate investing. Hurry up and invest in real estate right now.
Of course, we don’t promote the “monkey see, monkey do” mentality here. We just know that it is obvious evidence that investment properties are hot right now and for good reasons. Those good reasons for investing in the real estate market 2018? We can tell you all about them here.
Scouting Out the Competition for Buying Investment Properties
The competition is at record highs in the real estate market 2018. How do we know? Take a look at the numbers (provided by Realtor.com from a report of the current housing market in April 2018):
Median House Price: $290,000
Days on Market: 59 days
Active Listings: 1,355,381
Key Takeaways:
- The median house price of investment properties is the highest the US housing market has seen since 2012; up 8% from this time last year, 4% from last month
- With investment properties remaining on the market for an average of 59 days, real estate sales are increasing; 4 days less than last month
- 520,000 new investment property listings hit the current housing market; 10% more than last month, 2% more than last April; still, housing inventory is down 6% (100,000 listings) overall from last year
Related: Is the 2018 US Housing Market a Seller’s Market or a Buyer’s Market?
High prices for investment properties, low days on market and, despite attempts to combat the shortage, housing inventory remains low. Didn’t we tell you? Real estate investors are buying investment properties at historical speeds in the current housing market. Even the higher prices, fierce competition, lack of choices of investment properties, and overall atmosphere of a seller’s market isn’t discouraging real estate investors from getting a piece of the current housing market 2018.
Worried about finding the best investment properties in a competitive seller’s market? You don’t have to be if you use Mashvisor. To start looking for and analyzing the best investment properties in your city and neighborhood of choice, click here.
Again, while we don’t recommend blindly following the real estate investing crowd, there have to be reasons why the real estate market 2018 is so hot right now. Let’s take a look.
Higher Rental Income in the Real Estate Market 2018
This is the first and maybe the best reason why smart real estate investors are snatching up investment properties right off the market. Rental rates are increasing across the hottest real estate markets. Higher rental rates= more rental income= better return on investment in the real estate market 2018.
There are a few cities that stand out; not only are rental rates increasing in these real estate markets but, in general, they are great places to invest in real estate right now.
Rental rates of one bedroom investment properties increased by 5% to $1,890
Rental rates of two bedroom investment properties increased by 4.6% to $2,500
Rental rates of one bedroom investment properties increased by 5% to $1,470
Rental rates of two bedroom investment properties increased by 5.1% to $1,640
Rental rates of one bedroom investment properties increased by 4.8% to $1,310
Rental rates of two bedroom investment properties increased by 5.1% to $1,440
Related: 9 Best Cities to Buy Rental Properties for 2018
Even cities like Baltimore, San Francisco, San Jose, New York, and Los Angeles saw increases this month for either one or two bedroom investment properties. On a national level, two bedroom investment properties are faring better in the current housing market, with an increase in the rental rate of 1.1% to $1,414.
Becoming a landlord in a time where rental rates are on the rise is one of the best financial decisions you can make.
Find one bedroom or two bedroom investment properties quickly and benefit from high rental rates right now. How? Use Mashvisor’s investment calculator.
Search one of the top real estate markets from our list above, and sort by the number of bedrooms (not to mention all of the other neat filters Mashvisor’s investment calculator provides!).
Try it out for yourself. To start your 14-day free trial with Mashvisor and subscribe to our services with a 20% discount after, click here.
Ever-rising Value of Investment Properties= Major Real Estate Appreciation Gains
The median house price is already pretty high and, according to Zillow, it’ll go up at least another 4.2%. Considering the jump in 4% from last month alone, I’d say that prediction is a conservative one for the real estate market 2018. Whatever the increase, it all adds up to major real estate appreciation gains.
As a real estate investor, you invest for rental income as well as real estate appreciation. This allows you to make money from tenants in the meantime while you wait for real estate appreciation to occur. Natural real estate appreciation takes time, no doubt. But with the state of the current housing market, you can flip investment properties and benefit from real estate appreciation and rising investment property prices pretty quickly!
Increasing Interest Rates?! No Thank You
Another major reason real estate investors are making the move and buying investment properties right now in the real estate market 2018 is increasing interest rates. If you plan on using traditional investment property financing for real estate investing, then this is a great reason to invest in real estate right now.
At the end of March, interest rates went up 25 basis points and there is likely to be at least three to four more increases as the year moves forward. The best thing you can do is to find a property now, apply for a loan and get a fixed interest rate. Wait any longer and that increased rental income we talked about earlier? It’ll all go towards monthly mortgage payments thanks to higher interest rates.
Investment Properties Shield Against Rising Cost of Living
A general trend that goes hand in hand with rising prices of investment properties is the rise in the cost of living. Some cities have experienced a sharp rise in the cost of living and are more expensive to live in than ever. As a real estate investor and landlord, you’re protected from this in a way. If you go after those fixed interest rates we talked about, you’ll get to charge that increased rent price we took a look at. Overall, you’ll be making money in real estate and profiting from the increased cost of living if you invest right now.
Our Recommendation? Buy Airbnb Investment Properties Right Now!
While Airbnb investment properties won’t let you benefit from those increases in rental rates, they have their own benefits. These benefits are mostly gained during the summer and winter months of owning an Airbnb investment property. We’re talking about the highest Airbnb rental income and Airbnb occupancy rate thanks to things like festivals, concerts, conventions, vacation-times, and the holiday seasons that follow. If you buy an Airbnb investment property right now, you can get it set up in time to benefit from all of these things come the summer and winter of 2018.
Learn more: Why NOW is the Time to Buy an Airbnb Investment Property
Hurry Up and Buy an Investment Property Now
Real estate investors in the current housing market are not buying investment properties at record speeds for no reason. They have 5 great reasons for buying investment property right now rather than later in the real estate market 2018. On top of all of the other benefits of real estate investing, what more could you ask for?
Be sure to use Mashvisor’s investment calculator to find the best investment properties in this competitive market. They exist and are still out there. Let us help you find them. To learn more about our product, click here.