The stock market today continues to be known for its temperamental up-and-down swing with volatile risk. With erratic fluctuation and disappointing loss, the ringing of the closing bell on Wall Street may prompt many investors to consider other alternatives for their investments. Investing in single-family rental property may prove to be a more excellent strategy option for the concerned investor who desires more stability with less risk in their investments.
Almost 75 percent of real estate investors prefer single-family rentals in their portfolio of investments. With such a higher percentage, what makes single-family rentals stand out as the best option for investors?
The turbulent swaying of stock market prices does not affect real estate investors as much as other investors. Real estate investments provide more dependability and strength over time. Their reputation to maintain solidity and value over time with less risk make them the better option. Here are a few reasons why.
A healthier housing market
Unemployment rates fell to 3.7 percent in the fall of 2018. This drop set an all-time record for the lowest unemployment rate in nearly 50 years. Low unemployment rates in the country reflect a healthier economy overall. Additionally, current lower interest rates contribute as well. With the anticipation of interest rates increasing soon, this may cause potential homeowners to reconsider their option to purchase and remain renters instead. Low interest rates simultaneously with low unemployment rates equals a more stable investment with single-family rentals.
The renter demographic is changing
Diversified renters fueling new patterns in the housing market include:
1) Millennials in debt and baby boomers in retirement who choose to rent rather for convenience, flexibility and ease.
2) Renters who cannot afford to purchase a home due to lack of credit and financing.
3) Renters who decide not to pursue homeownership due to the uncertain future of real estate values.
A profitable future economic forecast – supply and demand
Demand for rental property remains a constant need from various demographic backgrounds. Single-family rental investments over time have a steady proven track record of success. As owners meet the continual demand of more single-family rental properties in the housing market, they reap the financial profit of their investments.