Published by Forbes.com | October 12, 2022
Softening markets are a time of opportunity.
Amid mounting evidence that the rapid rise in home prices is over, investors in rental property will have more options over the next few years as sellers outnumber buyers and prices deflate – slowly in most markets but very rapidly in others.
As has ALWAYS happened in the past, home prices and rents will eventually re-align with local income. This readjustment may take years but investors don’t need to wait that long to spot good opportunities.
In all real estate markets some local areas do better than others, on the downside as well as in boom times. Investors can spot the differences using solid local data.
Local data can tell you if there will be strong or weak demand for housing, in what rent range you find the heart of the rental market, and what type of investment will fare best in the local housing mix. Then investors can decide if an available property is a good fit for the local conditions.
Softening markets are a time of opportunity. You’re looking for an investment that will retain its value and produce a good income year after year, well into the future. If you take the time to analyze the desirability of a local area, the most appropriate rent, and the most suitable type of rental for the local housing structure, you’ve got the best chance for a solid long-term investment.
For best practices on how to do this, continue reading the full article.
