Published September 15, 2022. Updated July 2023.
With the past few years of general uncertainty about the economy, real estate market, and more, real investors may be a bit hesitant to jump on putting money into new ventures.
People may wonder what the future holds between rising inflation and a fluctuating job market. As a result, businesses have many questions about how to proceed to be successful. Property investors are in the same position, wondering if they should continue to move forward with their investments as planned.
What will the ROI look like through 2023 and into 2024? If you're questioning whether owning a rental property right now is worth it or not, you're not alone.
It's common to take a step back and research the current economic landscape before moving forward. However, when you know what to do, it's best to act so you don't lose out on potential opportunities.
You're here for a reason! Our Philadelphia property management team can tell you four reasons why owning a rental property in 2023 (and beyond) is worth it.
1. Mortgage Rates Are Still Relatively Low (Hear Us Out)
Yes, we see the same reports telling us how interest rates are rising (continually). It's true that rates are higher today than they were a year ago and definitely higher than a few years ago.
However, mortgage rates remain fairly low compared to historical rates that have been much higher. For example, in the 80s, rates were in the high teens to 20%.
That is good news, according to investment property management companies like Rentwell. Since rising rates are making it more challenging for potential homeowners to buy properties, real estate investors can acquire properties as rentals with financing and still historically low interest rates.
In fact, if you're considering buying a rental property, many experts believe rates aren't likely to get back to the historic lows we saw several years ago. It's a good time to get into the real estate market (before rates go even higher).
We know that 7% might seem "high" compared to this time last year or a couple of years ago. However, looking further back over the past decades, 7% is still a remarkably low rate.
2. Real Estate Does Well During a Recession and Struggling Economy
We won't get into the debate about if we are or have been in a recession lately. However, we are seeing the economy struggle.
Some industries are taking a financial hit, while others seem more insulated. However, some industries do well during a recession. Fortunately, real estate is one of these industries!
No matter what is happening in the world, people still need a place to sleep and live. Therefore, there will always be a need for homes. So, real estate typically continues to flourish during a recession.
Another issue that can be helpful to a property investor during a recession is that home prices may fluctuate due to a decrease in demand from homeowners. This lower demand can open up opportunities for investors. With the help of a Philadelphia property management team, you can find some good deals to build your portfolio for long-term success.
3. Rentals Are Popular During Economic Instability
We mentioned that demand for home purchases lowers during tough times. Most people don't want to go out and purchase a new home during economic downturns and instability. They may be unsure about what the future holds or whether they will want to stay in the same area long-term. In addition, they may be worried about the value of home prices in the future.
As a result, many people who don't already have a house shift their focus to renting a home instead of buying. In addition, people already in a rental will feel more comfortable staying put because of the uncertainty around them.
This allows property investors to remain successful by providing quality rental housing during this time, even if the overall outlook may seem bleak.
4. Recovery is on the Horizon
Even though the U.S. has been hit with a few curveballs over the past few years, things will turn around. Recovery is always on the horizon, and it's only a matter of time before the economy catches up and begins to boom again.
Property owners who take advantage of the low interest rates, purchasing opportunities, and people's interest in renting will be one step ahead when recovery hits. Investors in real estate will have a locked-in interest rate and can increase rental rates as the economy recovers.
If you've been unsure that owning rental properties is a good idea right now or looking into 2024, our Philadelphia property managers are confident that it is a smart way to invest and build long-term income!
Work With Philadelphia Property Managers When Owning Rental Properties
"Owning" investment properties won't put more money in your pocket without managing them properly. Take advantage of the opportunities for rental real estate investing by getting in touch with a property manager in Philadelphia! Just search for "property management companies near me" and reach out to Rentwell.
Rentwell is a top property management company in teh Philadelphia area, here to guide you through economic challenges and market uncertainty while helping you reach your financial goals. We offer full-service property management, including taking care of lease signings, tenant screenings, rent collection, and much more. Reach out to our team to learn more about how our property management services can help you capitalize on owning rental properties today!
