Why Residential Real Estate Investing is the Smart Bet in 2018

27 Feb Why Residential Real Estate Investing is the Smart Bet in 2018

Over the last year, we’ve seen the U.S. stock market reach shocking, all-time highs. Now it seems we may finally be entering a cooling period, with dramatic dips in the market causing many investors to pause with concern. It’s also causing many Americans to worry about the state of the U.S. economy—particularly those considering making a first-time investment.

Strong buying power

The good news is that despite the anxiety on Wall Street, the U.S. economy is actually doing really well right now. Jobs are being created, consumers are spending, and national wages are climbing. In fact, wages are up 2.9% and are growing at the fastest pace since 2009. The U.S. economy also just added over 200,000 jobs, with the unemployment rate at its lowest point since the year 2000.

What does all that boil down to? The economy is healthy and individual buying power is strong. This is just one of the reasons why residential real estate investing (REI) is a smart bet in 2018.

An accelerating market

Another reason to bet on real estate in 2018? In recent years, the housing market has seen stable, responsible growth. Since the housing market crash in 2008, prices have been climbing steadily. The national growth rate has been relatively stable since 2011. In fact, over the last few years, home prices have been appreciating at almost double the average rate. While the norm is 3 percent on average, according to the National Case-Shiller Index, home prices have been increasing by around 5 to 6 percent over the last two years.

While nothing is guaranteed, experts predict that home prices will continue to gradually increase over the course of this year. The combination of a strong economy and a healthy housing market makes residential real estate investing a very appealing option in 2018.

Continuous cash flow

Like anything else, residential real estate investing is especially challenging when you’re first getting started. However, the beauty of the business is that once you learn the ins and outs, it’s a repeatable process that will continue to earn you money over time. With the right approach, a real estate investor can invest in multiple properties and increase cash flow over time.

BRRRR is a popular investment strategy because it encourages buy-and-hold investors to repeat the process after their first residential real estate investment. It stands for: Buy, Rehab, Rent, Refinance, Repeat. In other words, an investor will purchase a rental property that needs some TLC, increase the value by rehabbing the property, rent it out to a tenant, and then refinance the home to make his or her money back—and then some. This profit pays for the next investment and so on, which is where the repeat step comes in. At the same time, each home also continues to generate rental income each month.

Investing made easier

REI software is making it easier than ever before to make smart, fast decisions on potential investments. In the past, the property discovery stage has been very time-consuming for investors. However, with access to the right tools, investors can locate the best deals and make strategic decisions based on real-time market data.

Not only can you utilize REI software to save time and maximize profits, but you can also use it to greatly minimize risk. While no investment is without risk, these tools allow residential real estate investors to make smarter (and ultimately more profitable) investments.

Want to learn more about residential real estate investing and the tools that can take your investment portfolio to the next level? Sign up for a live Deal Finding Friday with Privy by clicking the image below.