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Is this a good time to invest in another property? Navigating the investment property market in 2022

Posted on August 19, 2022 by Tamara.

We handle all types of clients at Mortgage Maestro Group, from first-time home buyers to experienced real estate professionals. More and more often we are working with folks looking to purchase real estate as an investment, and now is a great time to take a look at this particular market. With some of the recent changes that have happened in the economy, there are a lot of great opportunities to purchase property and use real estate as part of your investment strategy.

RISING RENTS

One of the most obvious ways to make money after purchasing a new piece of property is renting. Recent reporting from Axios indicates that “Asking rents in the second quarter were 23% higher nationwide compared to the same period in 2019.” Here, ‘asking rents’ refers to first-time lease contracts, although renegotiations are also rising steadily with inflation. Rental rates tend to increase during economic downturns as well, as home purchases can seem more risky and folks have less cash in their pocket. This is all happening while there is still a high demand for housing. Given the way that these factors are coming together, now is a good time to purchase a rental property.

NEW LEVERAGE

If you look at the data from just four or five months ago, there are new opportunities emerging in the market for buying investment properties. Housing demand has waned throughout the summer as the stock market has taken a slide and federal interest rates have increased to help curb inflation. This has put the ball back into the court of buyers. Today, sellers are receiving fewer offers and have less leverage than they did in March or April when the market was red hot. This means that a lot of properties can be purchased without having to make concessions like all-cash offers. New leverage means that you won’t have to pay a premium for a new investment property.

UPKEEP

One of the things to keep in the back of your mind when considering buying an investment property is upkeep. Things break, need to be updated, repainted, maintained, etc. etc. During the COVID-19 pandemic a lot of these costs grew exponentially. Building materials and labor skyrocketed, and lead times for basic needs like appliances grew to months. Now these markets have had time to adjust, and upkeep is far less expensive than it was a year or 18 months ago. For a period of time during the pandemic, it was easy to lose value on an investment property because upkeep was just so difficult. Now that looks to be in the rearview mirror.

MONEY DOWN

Our Mortgage Maestro Group experts are committed to finding you the best investment property available, and a lot of that has to do with limiting down payments. There are a number of ways to reduce your down payment below the levels you would see in a traditional mortgage. This means that you will have more cash in your pocket to put into maintaining your property. Give us a call today and we can take a look at what it will cost to get you into a new investment property.

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