When it comes to building wealth, you really only have 3 options at your disposal… entrepreneurship, financial investments and the real estate market.
Today we’ll be touching on the latter.
If you’ve made it a point to earn some extra income from renting out homes or apartments during 2019, then here are some hot tips on some of your best bets.
Because of low job rates and inflation-adjusted earnings remaining the same for the past decade, it’s fair to say that we should continue to see a high demand for rental properties.
When scanning the market for a good entry point, you should focus on real estate where the rent doesn’t stray more than 25% or so above the average.
Another thing to take into consideration is the economy itself.
Aim for homes or apartments in an area where jobs have grown above the national rate of 1.5% during 2018.
Apart from that, make sure the demand for housing is relatively good. Typically, you want to see home prices increase between 5% and 10% since the past year.
At the same time, you don’t want these price tags to be too steep.
You can check this by comparing current home prices to the “income” price. Just make sure the values don’t exceed 30%.
Finally, narrow your investments down by excluding properties that don’t fall into the target rent range.
Although these values often differ based on location, areas near colleges, hospitals and retail centers tend to have homes or apartments that bounce within this range and therefore serve as solid investment opportunities.
Keeping all this information in mind, there are a few cities worth mentioning that meet this criteria and may be your best bet in terms of real estate profitability.
Orlando, Florida is one example, considering job growth is at 4.7%.
Raleigh, North Carolina is another option to consider as job growth is relatively healthy and home prices have already increased 7% since last year.
Believe it or not, Cleveland, Ohio checks off all the boxes as well with job growth at 2.5% and home prices at a 5% increase!
The point is, if you’re serious about giving real estate a go during 2019, don’t go in blind.
Use job growth rates, home price fluctuations and location to your advantage as you move forward and see how it pays off in the long run.