Rental real estate has always been considered a lucrative and stable investment. Traditionally, real estate tends to appreciate over time, so it’s a great hedge against inflation. At the same time, rental properties – whether they appreciate or not – give investors regular income that they can use to pay down their mortgages, save for retirement, and/or invest in other properties.
As much as rental real estate has always been a good choice for most investors, this year looks particularly good for this investing sector. Why? Several factors point toward profits for investors getting into rental properties.
As of last year, the United States gained a new nickname – Rental Nation. Before the housing collapse in 2008, renting was seen as a failure or a sign of financial struggle. If you were eligible to buy a house, you were expected to do so. After the housing bubble burst, though, a couple of things happened.
First, many people who were once eligible to purchase properties are now relegated to renting for several years because they were forced to go through short sales or file for bankruptcy. At the same time, thanks to the fluctuations in housing markets around the country, more and more people are seeing renting as a viable option that will not put them in as much financial danger as buying a house in a questionable market. Thus, there’s more demand for quality rental properties all over the United States.
Monthly Cash Flow
With an increased demand for rental properties, you can be sure that your property management company will have no problem acquiring quality tenants who will pay their rent on time every month and take good care of your property. This will result in monthly positive cash flow from the property. Thus, whether or not the property appreciates, you can gain passive income from it that you can use to grow your investment portfolio and your net worth.
While we have seen one significant crash and a lot of fluctuation over the past few years, over the long term property tends to appreciate. Thus, while you’re making monthly income from your rental property, you will also have a quality hedge against inflation with your initial investment. And, when you do decide to sell in the future, you’re likely to sell at a significant profit.
Looking toward other, larger investments in the future? You can actually use your rental properties as leverage and collateral for those. Plus, when you decide to sell a property with the intent of buying another investment property within the next few months, you can apply a 1031 exchange to it and defer your capital gains tax for as long as you own that property. Then, when you eventually decide to sell that property you can do the same thing again if you intend to continue investing.
Texas Is a Market to Watch
The rental markets throughout Texas, and especially in the Dallas-Fort Worth area, are showing consistent and significant growth. With numerous major corporations calling Dallas home, new residents are moving to the area all the time, and they need quality apartments and houses to rent. Thus, the market is in the perfect place to yield great returns for investors buying rental homes.
You can see, now, how 2019 is an exciting year for rental real estate investments in Dallas. Whether you’re interested in purchasing single-family homes, apartment buildings, or equity in larger commercial residential properties, now is the time to get on board with Dallas rental investments. Talk with a trusted financial advisor today to determine the best investment(s) for your portfolio.