Are you looking for a place to invest your money but struggling to make a decision on where to put the funds? The stock market, mutual funds, a business venture, and real estate all prove to be profitable. If you want to make big bucks and get a promising return on investment, property management Sacramento companies are seeing investment property owners reach their wildest financial dreams by choosing real estate. Did you know that in 2018, renters paid out more than $504 billion dollars to landlords and management companies? Yes, you read that right, billion. It greatly surpassed 2017’s amount of just $12.6 billion. If you want to get in on the action, there is still room for you.
Building to Rent, Not Sell
It is no secret that rising interest rates, stricter zoning and permitting, and an increase over recent years in home building materials are not only making housing unaffordable, but also scarce. As hopeful wannabe homeowners have saved money for a down payment over the years and excelled in the workforce to achieve their desired salary, their dreams of becoming a homeowner are getting crushed. And while we do not have a solution to homeownership problems, property management Sacramento company, RPM Select is aware of a home builder that has found the light at the end of the dark tunnel. Christopher Todd Communities, LLC, built more than 450 homes in the Phoenix, Arizona, area last year. The catch is that they do not build homes for ownership, but for rental. These unique communities are horizontal apartment communities made up of single family homes. Occupants do not need to qualify for a loan with a high interest rate to get into affordable single family housing. They can rent a brand new single family home, tailored to their choice, and save the money that would otherwise go to pay interest. The concept of build-to-rent is catching on across the country. Developers find it extra attractive that they can give high quality service to their tenants because the houses are in a concentrated area. AHV Communities, LLC, is developing this same kind of community in Texas, BB Living is also developing in Phoenix, and NexMetro Communities will break ground on $300 million in projects in 2019. It is a business model that has taken off and is becoming increasingly successful amongst national companies in property management.
Sacramento Rental Properties Remain Profitable
Select understands that individual property owners do not have the capital to build entire built-to-rent communities, but they can invest in a rental properties and see great returns with their investment due to the high demand for rental properties. According to Local Market Monitor, Sacramento made the top 25 best markets for rental properties in 2018. Sacramento has a population of more than 2.2 million people and a job growth rate of 1.8 percent annually. The research also found that Sacramento has a 4 percent population growth over a 3 year period. Owning a rental property in a community with job growth and population growth is a guaranteed way to fill a vacancy. The average home price is $348,000 which is on the higher end of the top 25 list, but still proves to be profitable with the help of experts in the property management Sacramento industry. Select specializes in the Sacramento community and pays great attention to each property it manages.
Getting a Loan for a Rental Property
Before diving in head first, there are some things to know and consider when purchasing an investment property for the sole purpose of renting it out. Unlike purchasing an owner-occupied home, rentals require more. It is common for lenders to require a minimum down payment of 20 percent, since mortgage insurance is not available for investment properties. Rental properties typically have higher interest rates associated with them as well as different approval requirements than owner-occupied loans. If you are looking to buy an investment property, speak with a mortgage consultant to determine your requirements.
Renting Out Your House with the Top Property Management Sacramento Company
Owning a rental property is a big money maker, but it also requires a lot of time, attention, expertise, and organization. Managing a rental property without knowledge or experience has been known to land investors in hot water. When property owners need to hire someone they can trust, they call Select. With more than 35 years of experience, we know the laws and regulations. We take care of the daily maintenance calls from tenants, scheduling of maintenance, rent collection, accounting, move ins and move outs, marketing, showings of the property, and uphold a rigorous tenant screening process. We find our clients the most qualified tenants, in record time.
Get rich the easy way. Let someone else pay the mortgage and manage the property for you. Call the top property management Sacramento company, Select today.
Navigating the waters of choosing to rent out your home or list it for sale can be difficult. There are so many options and what-ifs that present themself with either decision. There are many pros and many cons to each. It comes down to the personal decision of the homeowner determining what is best for them. Property management companies in Sacramento are seeing a large increase in the amount of properties that are listed as rentals in comparison to for sale signs. With mortgage interest rates hovering around five percent at the start of 2019, purchasing a house is becoming increasingly unaffordable. It is not a buyers market. It is a renters market. That is why choosing to list your house for rent can prove to be a very profitable choice in this economy, and here’s why.
Why Is Buying a House Unaffordable?
Many factors play a role in making housing affordable and unaffordable, but recent reports released at the beginning of 2019 are taking a look back at 2018 to see exactly what the market did to land the U.S. in an unaffordable housing market. Last year, unemployment nearly hit a fifty year low while the amount of job openings were high. You would think that with more citizens employed, they would have more money to spend and be purchasing houses. However, mortgage interest rates also increased putting the once affordable house, out of reach for even the well-employed. Property management companies in Sacramento know that these five percent mortgage rates may not seem high to those over the age of 40 who bought a house in the past with rates between ten and fourteen percent. But the increase between four and five percent is making all the difference for millenials.
In 2018, home builders built fewer affordable new single family houses than in past years. Reports show 50,000 affordable single family homes around 1,400 square feet were built in 2018 compared to the typical 200,000 in normal years. Instead, builders have their eyes set on expensive apartment complexes and executive housing. Let’s not forget that the price of building materials, including lumber and gypsum, have also increased over recent years. Builders are also running into stiff zoning restrictions and higher permitting costs in urban areas where the affordable housing shortage is especially tight.
How Homeowners Can Make Money In a Renters Market
Property management companies in Sacramento see houses listed for sale sit on the market for months without selling. All of the above mentioned reasons are to blame for this discouraging situation. Homeowners need not worry about selling their home for less than it is worth just to get it off the market. They have another choice. A choice that can result in big cash flow. Listing a home for rent in a renters market is the smart choice if you do not need the equity out of your home to purchase a new one. HotPads released a recent report showing that in 2018, renters paid a record $504.4 billion in rent compared to 2017’s whopping total of $12.6 billion. Going along with the increased amount Americans spend on rent, Pew Research Center has also found that more households are renting than at any point in the past 50 years. Sacramento property management companies not only saw an increase in the amount of people renting, but also an increase in the rental price from 2017 to 2018. San Francisco takes the cake with the highest monthly average rent price for a one bedroom apartment at $3,535. New York City falls slightly behind that at $2,895. While Sacramento might not at as high at $3,535 per month for a one bedroom, it is still very high at $1,140 per month as of January 2019. That is a 3% increase from 2017. These rent increases allows property owners the opportunity to make money despite not being able to sell their house. They will experience low vacancy rates due to the apprehension of would-be home buyers. A high demand for rentals helps drive up the rental price because of basic supply and demand economics. Not only can property owners expect to find a large pool of quality prospective tenants, but also the potential to make big bucks.
Why Property Owners Need the Top Property Management Company in Sacramento
Renting out your house is no easy task. Many property owners underestimate the time, organization, stress, and overall management duties that a rental home requires. RPM Select is the leader of property management in Sacramento and has a proven track record for over 30 years. Select has lower vacancy rates than its competitors, while continuing to provide quality service and find highly qualified applicants. Select handles everything for property owners including conducting market research to ensure you get top dollar in rent, marketing the house, showing the house, conducting a rigorous tenant screening process, signing lease agreements, handling and scheduling of maintenance, rent collection, property inspections, move-outs, and turnovers. We know you have a choice from many different property management companies. Don’t make the mistake of hiring the wrong property management company. Sacramento is where all your rental investment dreams become reality. Call Select today.