News: The Real Scene
When you think of investing in real estate, your mind might jump to buying a primary residence. But what about real estate to strengthen your financial portfolio?
In today’s market, with rising mortgage rates and increasing rental demand, savvy investors are finding opportunities to build wealth with rental properties.
Let me share a success story. One of my clients bought a property in Hummelstown two years ago, recognizing it as a prime rental candidate. Before she even settled, she had secured a reliable tenant paying market rent. For the duration of their lease, the tenant never missed a payment. When the time felt right, my client sold the property for a significant profit.
Here’s what makes this story remarkable: she purchased the property with cash, earning about 10% of her investment back annually in rental income. That’s a 20% return over two years. Then she sold the property for nearly 40% more than her purchase price. Altogether, her total return on investment exceeded 60% in just over two years. Talk about a golden goose!
Rising Mortgage Rates Provide a Boost?
Can higher mortgage rates actually help real estate investors? Surprisingly, yes — when it comes to rentals. Rising rates often price many would-be buyers out of the market, pushing them into the rental pool instead. This creates a surge in demand for rental properties, which drives rents higher.
For investors, this presents an opportunity to generate consistent income while holding onto a property that’s likely to appreciate over time. Investors who can pay cash – or leverage existing equity for a smaller mortgage – are in an even better position to reap rewards, sidestepping financing costs.
In a market where inflation and high interest rates can feel like the enemy, rental properties act as a hedge with both rents and property values often keeping pace with rising costs. A well-selected rental property can become the cornerstone of your thriving investment strategy.
Closing the Deal
Investing in rental properties isn’t about crossing your fingers and hoping for a windfall. It’s about doing your homework, partnering with trusted professionals and committing to a strategy that balances risk and reward.
The real estate market shifts with the winds of the economy. But one thing never changes: people will always need a place to call home. For investors willing to play the long game, the rewards can be extraordinary.
Eileen S. Voyles is a Realtor with Berkshire Hathaway HomeServices Homesale Realty in Hershey, 501 West Governor Road. She is the founder of HelloHersheyPA, a Pennsylvania Benefit Company that promotes commerce and happy living in Hershey PA and beyond and www.ShopYokl.com. Eileen can be reached at 717-533-6222 or eileenvoyles@gmail.com.
Find more at https://news.thesunontheweb.com/articles/the-real-scene-58/
