Should You Invest in Real Estate This Year or Wait for 2018?

Should You Invest in Real Estate This Year or Wait for 2018

A house is still the best asset you can have. However, how would you know if it’s the perfect time for you to actually buy one?

Real estate has become the most popular vehicle for investment for the past 50 years. Why? It’s probably because it’s less complicated compared to investing in bonds or equities. In fact, it’s now considered to one of the five basic asset classes that all investors should add in their portfolio. Its profitability, liquidity, cash flow, and net worth are among its diversified benefits. However, buying one when the market is in a bad state is a financial suicide.

Is 2017 the right year to finally buy your own house? 

Rental Property Rates Continue to Increase

According to Zillow, an online real estate database company, rental property rates will continue to hike up until it reaches 1.7% by August this year. Things will be looking particularly good in cities like Portland, San Francisco, Denver, Seattle, and Cincinnati. These cities are notable for offering amenities almost similar to that of New York without the high cost of living. Thus, lots of new residents are flocking towards them and are looking for homes. According to Apartment List, the current median rent price for a simple apartment is at $1,100 in most cities. If you are living somewhere in San Francisco, then you can rent your place to about $4,570.

Change in Tax Structure

Since the election of Donald Trump, real estate experts have expected him to run fewer business regulations. Thus, lenders can get more freedom with underwriting the standards. Also, nontraditional lenders can already enter residential lending markets without any trouble. Ultimately, Trump’s policies could lead to a tax structure that advantageous to all entrepreneurs and people looking to expand their assets and invest in Houston houses.

Production of Stronger Yields in Several Cities

Different cities in the country including Jordan Lake, has produced greater yield in the rental market. And since choosing a rental property is all about location, choosing a hot-spot city will be most profitable. According to RentRange, top performing cities can be located in the Rust Belt. This includes Ohio, Canton, Pittsburgh, Cleveland, etc.

Millenials Looking for Housing

Millenials born between the 1980s and 1990s are now expected to purchase their first homes this year. This is according to the National Association of Realtors, Washington, D.C. Harvard data also shows about 40% of renters this year is going to be under 35 with an average annual income of $25,000. Those who still have to pay their student loans are more likely to choose condo units. However, those without any financial burden are more likely to buy a house. In fact, according to NAR, about 17% of buyers who are under 35 have already made their down payment last 2016.

Conclusion

Because the demand for rental home is heating up, rental prices will continue to increase and realtors will continue to get better profit yields. The way things are at the moment, 2017 could be the perfect time to invest in real estate.

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