Purchasing an investment property is a different process than buying a personal home. An investment property needs to provide cash flow – in general, positive cash flow. With an investment property, the numbers need to match up in such a way that your rent covers your monthly mortgage, with all other fees factored in as well. This isn’t easy, but it is possible; and, even better, it is possible in the Austin area! So, is 2017 the year to invest in real estate? Take a look at some of the predictions that may mean a good year for the investment market:
Rental Rates Will Continue Upward Trend
When choosing an investment property to purchase, it is important to determine how much to set the rent at for that property. And, good news for investors, it looks as if the rental rates will continue their upward trend in 2017. According to Zillow, on average, rental rates will increase by 1.7 percent through August of 2017. While this is the average across the United States, Zillow estimates the rental rates across the Austin area will appreciate 3.2 percent over the next year; this is up from a 2 percent increase the year before.
Emergence of the ’18-Hour City’
What is an ’18 Hour City’? According to Investopedia, an ‘18-Hour City’ is “a second-tier city with above-average urban population growth that offers a lower cost of living and lower cost of doing business than first-tier cities.”
What cities are considered an ’18-Hour City’? According to Investopedia, think Denver, Cincinnati, Indianapolis or Austin, Texas.
Many investors have picked up on the ’18-Hour City’ trend. And, with good reason. According to Harvard, data shows that nearly 40 percent of all renters are under the age of 35 – making the Millennial population a good chunk of the rental population. Just out of school, Millennials are looking for an affordable location to start their career, while also looking for the same amenities as the “big six” markets (Boston, Los Angeles, New York, San Francisco, Chicago, and Washington D.C.).
Overall, the 2017 rental market looks inviting for investors. Just be sure to choose the right investment property and property management group!
If you have any questions about investing and how you might be able to build a foundation of wealth through real estate, contact TALK Property Management at (512) 947-1828 or DBrown@TalkPropertyManagement.com.