If you have been on the fence about investing in real estate, 2017 could be your year. Diversifying your portfolio while creating passive income is one of the top reasons people get into real estate investing. According to a report from the Joint Center for Housing Studies at Harvard University, the number of renter households in the US increased by 9 million between 2005 and 2015. This is the largest increase over a ten-year period since the 1960s. The demand for rental housing is expected to remain strong in 2017 so this could be a great year to begin your real estate investment portfolio.
Many economists predict that rates for rental properties will increase by up to 2% through August 2017. The largest metro markets are San Francisco, Cincinnati, Portland and of course, Seattle. To give you an idea of how much the rental market has increased, the national median rental price for a one bedroom is currently around $1100. A two bedroom comes in at about $1260 per month, but in the Seattle area, that same two-bedrooms can rent for as high as $2200.
While these numbers don’t sound too confident for renters, they are extremely positive for investors who are buying these rental properties in certain neighborhoods and markets, and because the housing market is in high demand, rental properties are a natural draw. Regardless of whether renters like it or not, they are renting properties at these prices hand over fist. Seattle rental prices have increased up to 16% over last year, but it’s also important to consider the gross yield and operating costs that must be deducted. Because Seattle home prices have also increased, all of that rental cash is not free and clear.
If you are considering investing in real estate in 2017, understand that it is truly all about location. Several hot neighborhoods throughout Seattle are ideal for investment purposes and using the right real estate agent help you find those gems is crucial to getting the cash flow income you desire. Investing in real estate can be an effective way to hedge against market volatility and create a steady income. If you’re considering investing in real estate or would like to know a little bit more about the hot neighborhoods for rentals, contact Mary Pong today.