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When is the best time to invest in a rental property?

Investors attempt to time market cycles in almost every market (stocks, cryptocurrencies, real estate, etc.) in order to maximize their profits. They strive to buy when prices are low and sell when they are high, following the “buy low, sell high” concept. Purchasing at the low point of a market cycle and selling at the high point is perfect…if you can time it. Investors that have a lot of money available and purchase houses at a bargain during a crash usually make a ton of money when they sell.  You have to be pretty lucky (or a genius) to time it just right. 

The truth is that right now is the ideal time to make a real estate investment.  House markets havea historical record of growing over time and you can supplement your income with your profit from renting. The ideal investment for 2022 is real estate since it offers double, treble, or even quadruple returns on your initial investment while interest rates are still low. Rentals will become more in demand.

2022 can be the year for you if you’re hoping to invest in real estate to profit greatly from rental properties. Rising home values will have an effect on the rental market. Rent may be out of reach for many people until the real estate market expands and the prices level off.

According to many local housing markets around Virginia remain very competitive. In 2022, there were around 40,000 closed sales in the Commonwealth, and 26% of those sales were completed in three days or less. The New River Valley and Roanoke Valley areas in southwest Virginia, in particular, saw the greatest percentage of sales in this category. For instance, in Montgomery County, 48.8% of all properties sold so far this year were listed for just three days or fewer. About 40.7% of transactions in this category occurred in the Roanoke County housing market, and 39% of Radford homes sold in three days or less.

In addition, the Virginia multifamily rental housing market has been extremely competitive, with rents rising significantly over the past year, as you can read at Economic Insights Blogs. As more people enter the rental market as a result of rising mortgage rates and increasing home prices, demand for rental housing is at an all-time high. Rents will therefore likely continue to rise more quickly than property prices in 2022 due to the continued high demand for rental homes.

Looking into purchasing an investment property? Talk to Erik, and he can help guide you through what to look for and what to expect.

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