Real estate has long been considered a top investment target. However, the recent recession has changed how many view what was once considered a cornerstone of investment portfolios. Instead of completely abandoning real estate, most experts agree that it’s better to focus on conservative, yet lucrative, markets.
Here are a few of the reasons why rental properties are a great addition for an investment portfolio.
Renting is Popular
In the past, most people moved out to the suburbs and bought a home when they had enough money. Today, more people are attracted to living in populous areas. Thanks to fairly low crime rates, city centers and other areas with walking access to restaurants and other amenities downtown, midtown and uptown areas are seeing a resurgence in interest. This trend is expected to continue as the economy improves and young people find better jobs.
Rentals are Even More Popular During Recession
Predicting recessions and bubbles is inherently difficult, but investing in rental properties is a great way to insulate yourself. When the housing market crashed, former homeowners turned to rental properties, and rental prices remained strong even when home prices plummeted. Rental prices continue to rise as the economy improves, and those who purchase rental properties can expect a solid return on their investments.
Areas Change Quickly
While gentrification is a controversial issue, there is no doubt that it helps those who offer rentals. As people look away from the suburbs and toward fun, connected areas, gentrification will continue in big and small cities. Because of this, there are great deals available for those who know a particular area and who are able to tell which area will become the next hip spot. While these purchases remain as steady investments, they can also yield tremendous returns should the area become more popular.
Help is Available
Managing property can be difficult, but there are experts who can help, like those here at Boundless Management. For those who do not wish to be involved in the day-to-day management of their properties will find services like ours available who can provide these services for a reasonable price. Doing so will allow you to focus on other areas while retaining your investment income.
Real estate has changed since the last recession, and investors are, understandably, a bit wary. However, the real estate field is not monolithic, and there are some investments that provide protection against economic stress. Before abandoning the idea of investing in real estate, consider purchasing a rental property to add to your portfolio.
