206-999-1690
larryreichle@remax.net
LOGIN | REGISTER

Larry & Kathy Reichle

Issaquah Real Estate | Call: 206-999-1690

LARRY & KATHY REICHLE, EASTSIDE REAL ESTATE TEAM

Call or Text Us – 206-999-1690

  • Home
  • About
    • About Larry & Kathy Reichle
    • Testimonials
    • Larry and Kathy’s Resume
    • References
  • Home Search
    • Search Options
      • Map Search
      • Advanced Home Search
      • Simple Home Search
      • Search by Address
      • Search by City
    • Search by Communities
      • Bellevue Real Estate
      • Issaquah Real Estate
      • Kirkland Real Estate
      • Maple Valley Real Estate
      • Redmond Real Estate
      • Sammamish Real Estate
  • Buyer
    • Lender
    • Thinking of Buying?
    • Mortgage Calculators
    • My Search Account
  • Seller
    • Thinking of Selling?
    • Our Sold Listings
  • What’s MY Home’s Value
  • Blog
    • Eastside Real Estate Blog
    • Issaquah Community Blog
  • Contact Information

3 Reasons to Invest in Single-Family Rentals

February 21, 2019 by Kathy Reichle Leave a Comment

A rental investment can be a safe haven in a volatile market.


With high demand and low supply, the housing market should remain strong in 2019

FEW PEOPLE TALK WITH their financial advisors about alternative investments like purchasing a property, but real estate may be a good strategy this year. It’s one that more high net worth investors seem to be employing to cope with market volatility.

A December 2018 survey from Millennium Trust Company found an increasing preference for alternative investments, including real estate. Among those surveyed who held real estate, 73 percent favored single-family rentals.

Robert Mulcahy, senior vice president of production and strategic initiatives at Angel Oak Prime Bridge in Atlanta, says a rental property investment is a great strategy for any investor, regardless of net worth. The market gyrations of 2018 and the outlook for real estate in the year ahead are compelling reasons to examine the benefits of owning a rental property.

“Since markets don’t exist in a vacuum, there tends to be a beta between the rental market and the stock market,” says Jason Haber, a real estate agent at Warburg Realty Partnership in New York. The difference, he says, is volatility.

“The rental market is reactionary to the general direction of the stock market,” Haber says, meaning that daily swings in stock prices don’t effect real estate investors like equity investors. “Real estate investments provide for more stability, and many markets can outperform the Dow and S&P 500.”

That may be music to the ears of volatility-weary investors. Here are three reasons why now is the perfect time to consider a property investment:

  • The 2019 outlook is strong.
  • Housing is bolstered by low unemployment.
  • Renter profiles are shifting.

The 2019 Outlook Is Strong

Quinn Palomino, co-founder and principal at Virtua Partners in San Diego, is optimistic about the outlook for leasing.

“Demand is high and supply is still constrained, particularly for entry-level housing,” she says. “We anticipate rent increases will outpace the overall commercial real estate market, landing in the 5 to 7 percent range.”

Palomino says these rentals are positioned to outperform stocks in 2019, as the market reacts to a slowdown in economic growth and recession fears. She cites the Great Recession, in which “single-family rentals did not have a down year in occupancy or rental rates.”

Housing Is Bolstered by Low Unemployment

Haber says that while the fundamentals of individual rental markets differ, two things are driving momentum: employment and interest rates.

“Generally speaking, a low unemployment environment translates into a stronger housing market,” Haber says. “Right now, we have both low unemployment and low interest rates. This dynamic has kept the housing market healthy.”

Additional rate hikes could give the single-family rental market an additional boost, says Nick Giovacchini, director of client services at AlphaFlow in San Francisco.

“With the Fed’s expectation of two more rate hikes this year, mortgage rates should rise once again,” he says. “(This) could potentially price some newer home buyers out of the market and keep them focused on rentals.”

Renter Profiles are Shifting

While low interest rates and job growth are leaving a positive mark on housing, Kevin Sneddon, founder and managing partner of the private client team at Compass in New York, says there’s a larger dynamic to consider.

“Renting single-family homes has become a new norm,” Sneddon says. He identifies three specific renter profiles that are fueling the new normal in the housing market.

The first is renters who can’t afford to buy because they lack a down payment on a mortgage. The second is those who don’t want to buy because they want flexibility. And the third group includes those who choose not to buy because they feel that real estate values will soften in the future.

Palomino says it’s largely millennials who are the main driving factor. “Millennials don’t have the same attachment to homeownership as preceding generations, are more transient and are overburdened with debt,” she says. “Yet, as millennial couples have children, they want to move out of the apartment and into a house with a backyard and garage.”[ 

It’s not just the younger crowd, however, who is on the hunt for homes to rent.

“As boomers are moving out of their previous homes, many are looking to downsize, but have less cash than expected,” Giovacchini says. As a result, they “may have to rent rather than purchase a new home.”

Those set on steering the course of single-family rental homes can benefit from doing their homework.

“The single-family rental market needs to be analyzed on a local level,” says Janine Yorio, CEO of Compound in New York. “We’ve seen tremendous discrepancies in rental growth and price appreciations across different locales.”

The biggest risk, she says, is the cyclical nature of real estate. Yorio makes a case for investing in multifamily properties through a real estate investment trust.

“Single-family investments at the individual level are far more risky than diversified REITs,” she says. “An owner needs to be ready for prolonged periods of vacancy, capital improvement requirements and dealing directly with problematic tenants.”

Yorio also says not all single-family residential investments are created equal: “It’s important to pay attention to more than just the initial rental yield or cap rate and pay attention to the near- and medium-term cash flow at the property level, taking into account required repairs and maintenance.”

There are also subtle differences in investing in a townhouse versus a single-family home. Town homes can carry fewer cost considerations regarding maintenance, repairs and landscaping if those expenses are handled by a homeowner’s or condo association.

Sneddon says the target tenant profile matters, as does your exit strategy. Most important, he says, is the likelihood that the asset will increase in value over time.

“Things like location, property condition, property style, local job growth, etc. are important factors to consider when selecting which single-family rentals to acquire,” he says.

Investors shouldn’t expect renting a home to be a passive investment.

“There’s a lot of work in being a landlord,” Yorio says. But outsourcing leasing or property management to a trusted team can ease the burden. 

By Rebecca Lake, Contributor


Filed Under: Rental Investments Tagged With: Baby Boomers, homeownership, Interest Rates, Millennials

We look forward to hearing from you Cancel reply

Eastside Real Estate Blog

The Cost Of Purchasing A Home In The U.S. Increased 55% Last Year. But It’s Still A Great Time To Buy A House For These Five Reasons

I’ve always been all-in on homeownership. Yet, for the first time in two decades since the beginning … [Read More...]

New Listings Signal Hope Is On The Horizon For Home Buyers

At the midpoint of April, housing markets are reflecting a changing landscape, according to a new … [Read More...]

Upscale Kitchen Features That Can Boost A Home’s Value

Between preparing to host family and friends for Thanksgiving and making gift lists and checking … [Read More...]

Contact Us

Issaquah real estate

Larry & Kathy Reichle

371 NE Gilman Blvd. #160
Issaquah, WA 98027

Phone: 206-999-1690

Contact Us

Digital Millennium Copyright Act Notice (DMCA)

Real Estate Tools

  • Search AccountCreate your Custom Home Search Account
  • Map ViewSearch For Eastside Real Estate With A Map Style Search
  • Email AlertsSign Up To Get New Listings Delivered To You via Email
  • My Home’s ValueCustom Tool To Get the Accurate Price of your Home

Eastside Real Estate Blog

The Cost Of Purchasing A Home In The U.S. Increased 55% Last Year. But It’s Still A Great Time To Buy A House For These Five Reasons

I’ve always been all-in on homeownership. Yet, for the first time in two decades … Read More

New Listings Signal Hope Is On The Horizon For Home Buyers

At the midpoint of April, housing markets are reflecting a changing landscape, … Read More

Real Estate in the Pacific Northwest

Real Estate in the Pacific Northwest

  • Aberdeen, WA Real Estate
  • Acme, WA Real Estate
  • Addy, WA Real Estate
  • Adna, WA Real Estate
  • Airway Heights, WA Real Estate
  • Alger, WA Real Estate
  • Algona, WA Real Estate
  • Allyn, WA Real Estate
  • Aloha, WA Real Estate
  • Amanda Park, WA Real Estate
  • Amboy, WA Real Estate
  • Anacortes, WA Real Estate
  • Anderson Island, WA Real Estate
  • Appleton, WA Real Estate
  • Ardenvoir, WA Real Estate
  • Ariel, WA Real Estate
  • Arlington, WA Real Estate
  • Ashford, WA Real Estate
  • Auburn, WA Real Estate
  • Bainbridge Island, WA Real Estate
  • Baring, WA Real Estate
  • Battle Ground, WA Real Estate
  • Bay Center, WA Real Estate
  • Beaux Arts, WA Real Estate
  • Beaver, WA Real Estate
  • Belfair, WA Real Estate
  • Bellevue, WA Real Estate
  • Bellingham, WA Real Estate
  • Benton City, WA Real Estate
  • Beverly, WA Real Estate
  • Bickleton, WA Real Estate
  • Birch Bay, WA Real Estate
  • Black Diamond, WA Real Estate
  • Blaine, WA Real Estate
  • Blakely Island, WA Real Estate
  • Boistfort, WA Real Estate
  • Bonney Lake, WA Real Estate
  • Bothell, WA Real Estate
  • Bow, WA Real Estate
  • Brady, WA Real Estate
  • Bremerton, WA Real Estate
  • Brewster, WA Real Estate
  • Bridgeport, WA Real Estate
  • Brier, WA Real Estate
  • Brinnon, WA Real Estate
  • Brush Prairie, WA Real Estate
  • Buckley, WA Real Estate
  • Bucoda, WA Real Estate
  • Burien, WA Real Estate
  • Burlington, WA Real Estate
  • Camano Island, WA Real Estate
  • Camas, WA Real Estate
  • Carbonado, WA Real Estate
  • Carlsborg, WA Real Estate
  • Carlton, WA Real Estate
  • Carnation, WA Real Estate
  • Carrolls, WA Real Estate
  • Cashmere, WA Real Estate
  • Castle Rock, WA Real Estate
  • Cathlamet, WA Real Estate
  • Center Island, WA Real Estate
  • Centerville, WA Real Estate
  • Centralia, WA Real Estate
  • Chehalis, WA Real Estate
  • Chelan, WA Real Estate
  • Chelan Falls, WA Real Estate
  • Cheney, WA Real Estate
  • Chimacum, WA Real Estate
  • Chinook, WA Real Estate
  • Cinebar, WA Real Estate
  • Clallam Bay, WA Real Estate
  • Cle Elum, WA Real Estate
  • Clearlake, WA Real Estate
  • Clinton, WA Real Estate
  • Clyde Hill, WA Real Estate
  • College Place, WA Real Estate
  • Colville, WA Real Estate
  • Conconully, WA Real Estate
  • Concrete, WA Real Estate
  • Connell, WA Real Estate
  • Conway, WA Real Estate
  • Copalis Beach, WA Real Estate
  • Copalis Crossing, WA Real Estate
  • Cosmopolis, WA Real Estate
  • Cougar, WA Real Estate
  • Coulee City, WA Real Estate
  • Coulee Dam, WA Real Estate
  • Coupeville, WA Real Estate
  • Covington, WA Real Estate
  • Crane Island, WA Real Estate
  • Creston, WA Real Estate
  • Curlew, WA Real Estate
  • Curtis, WA Real Estate
  • Custer, WA Real Estate
  • Cypress Island, WA Real Estate
  • Danville, WA Real Estate
  • Darrington, WA Real Estate
  • Davenport, WA Real Estate
  • Decatur Island, WA Real Estate
  • Deer Meadows, WA Real Estate
  • Deming, WA Real Estate
  • Des Moines, WA Real Estate
  • Doty, WA Real Estate
  • Dryad, WA Real Estate
  • Dupont, WA Real Estate
  • Duvall, WA Real Estate
  • East Olympia, WA Real Estate
  • East Wenatchee, WA Real Estate
  • Easton, WA Real Estate
  • Eatonville, WA Real Estate
  • Edgewood, WA Real Estate
  • Edison, WA Real Estate
  • Edmonds, WA Real Estate
  • Elbe, WA Real Estate
  • Electric City, WA Real Estate
  • Ellensburg, WA Real Estate
  • Elma, WA Real Estate
  • Elmer City, WA Real Estate
  • Entiat, WA Real Estate
  • Enumclaw, WA Real Estate
  • Ephrata, WA Real Estate
  • Ethel, WA Real Estate
  • Everett, WA Real Estate
  • Everson, WA Real Estate
  • Fall City, WA Real Estate
  • Federal Way, WA Real Estate
  • Ferndale, WA Real Estate
  • Fife, WA Real Estate
  • Fircrest, WA Real Estate
  • Ford, WA Real Estate
  • Forks, WA Real Estate
  • Fox Island, WA Real Estate
  • Freeland, WA Real Estate
  • Fruitland, WA Real Estate
  • Gardiner, WA Real Estate
  • George, WA Real Estate
  • Gig Harbor, WA Real Estate
  • Glacier, WA Real Estate
  • Glenoma, WA Real Estate
  • Gold Bar, WA Real Estate
  • Goldendale, WA Real Estate
  • Goose Prairie, WA Real Estate
  • Graham, WA Real Estate
  • Grand Coulee, WA Real Estate
  • Grand Mound, WA Real Estate
  • Grandview, WA Real Estate
  • Granite Falls, WA Real Estate
  • Grapeview, WA Real Estate
  • Grayland, WA Real Estate
  • Grays River, WA Real Estate
  • Greenbank, WA Real Estate
  • Greenwater, WA Real Estate
  • Guemes Island, WA Real Estate
  • Hansville, WA Real Estate
  • Harrah, WA Real Estate
  • Harrington, WA Real Estate
  • Hartline, WA Real Estate
  • Henry Island, WA Real Estate
  • Hobart, WA Real Estate
  • Hoodsport, WA Real Estate
  • Hoquiam, WA Real Estate
  • Humptulips, WA Real Estate
  • Hunters, WA Real Estate
  • Hunts Point, WA Real Estate
  • Ilwaco, WA Real Estate
  • Index, WA Real Estate
  • Indianola, WA Real Estate
  • Ione, WA Real Estate
  • Issaquah, WA Real Estate
  • Juanita, WA Real Estate
  • Kalama, WA Real Estate
  • Kapowsin, WA Real Estate
  • Keller, WA Real Estate
  • Kelso, WA Real Estate
  • Kendall, WA Real Estate
  • Kenmore, WA Real Estate
  • Kent, WA Real Estate
  • Kettle Falls, WA Real Estate
  • Keyport, WA Real Estate
  • Kingston, WA Real Estate
  • Kirkland, WA Real Estate
  • Kittitas, WA Real Estate
  • La Center, WA Real Estate
  • La Conner, WA Real Estate
  • Lacey, WA Real Estate
  • Lake City, WA Real Estate
  • Lake Forest Park, WA Real Estate
  • Lake Stevens, WA Real Estate
  • Lake Tapps, WA Real Estate
  • Lakebay, WA Real Estate
  • Lakewood, WA Real Estate
  • Langley, WA Real Estate
  • Leavenworth, WA Real Estate
  • Lebam, WA Real Estate
  • Lilliwaup, WA Real Estate
  • Lincoln, WA Real Estate
  • Lind, WA Real Estate
  • Long Beach, WA Real Estate
  • Longbranch, WA Real Estate
  • Longview, WA Real Estate
  • Loomis, WA Real Estate
  • Loon Lake, WA Real Estate
  • Lopez Island, WA Real Estate
  • Lummi Island, WA Real Estate
  • Lyle, WA Real Estate
  • Lyman, WA Real Estate
  • Lynden, WA Real Estate
  • Lynnwood, WA Real Estate
  • Machias, WA Real Estate
  • Malaga, WA Real Estate
  • Malo, WA Real Estate
  • Malone, WA Real Estate
  • Malott, WA Real Estate
  • Manchester, WA Real Estate
  • Mansfield, WA Real Estate
  • Manson, WA Real Estate
  • Maple Falls, WA Real Estate
  • Maple Valley, WA Real Estate
  • Marblemount, WA Real Estate
  • Marlin, WA Real Estate
  • Marysville, WA Real Estate
  • Mattawa, WA Real Estate
  • Mazama, WA Real Estate
  • McCleary, WA Real Estate
  • McKenna, WA Real Estate
  • Medical Lake, WA Real Estate
  • Medina, WA Real Estate
  • Mercer Island, WA Real Estate
  • Metaline Falls, WA Real Estate
  • Methow, WA Real Estate
  • Mill Creek, WA Real Estate
  • Milton, WA Real Estate
  • Mineral, WA Real Estate
  • Moclips, WA Real Estate
  • Monitor, WA Real Estate
  • Monroe, WA Real Estate
  • Montesano, WA Real Estate
  • Morton, WA Real Estate
  • Moses Lake, WA Real Estate
  • Mossyrock, WA Real Estate
  • Mount Vernon, WA Real Estate
  • Mountlake Terrace, WA Real Estate
  • Moxee, WA Real Estate
  • Mukilteo, WA Real Estate
  • Naches, WA Real Estate
  • Nahcotta, WA Real Estate
  • Napavine, WA Real Estate
  • Naselle, WA Real Estate
  • Neilton, WA Real Estate
  • Nespelem, WA Real Estate
  • Newcastle, WA Real Estate
  • Newport, WA Real Estate
  • Nooksack, WA Real Estate
  • Nordland, WA Real Estate
  • Normandy Park, WA Real Estate
  • North Bend, WA Real Estate
  • North Cove, WA Real Estate
  • Northport, WA Real Estate
  • Oak Harbor, WA Real Estate
  • Oakville, WA Real Estate
  • Obstruction Island, WA Real Estate
  • Ocean City, WA Real Estate
  • Ocean Park, WA Real Estate
  • Ocean Shores, WA Real Estate
  • Ocosta, WA Real Estate
  • Odessa, WA Real Estate
  • Okanogan, WA Real Estate
  • Olalla, WA Real Estate
  • Olympia, WA Real Estate
  • Omak, WA Real Estate
  • Onalaska, WA Real Estate
  • Orcas Island, WA Real Estate
  • Orondo, WA Real Estate
  • Oroville, WA Real Estate
  • Orting, WA Real Estate
  • Othello, WA Real Estate
  • Outlook, WA Real Estate
  • Oyhat, WA Real Estate
  • Oysterville, WA Real Estate
  • Pacific, WA Real Estate
  • Pacific Beach, WA Real Estate
  • Packwood, WA Real Estate
  • Parkland, WA Real Estate
  • Pasco, WA Real Estate
  • Pateros, WA Real Estate
  • Pe Ell, WA Real Estate
  • Pearl Island, WA Real Estate
  • Peshastin, WA Real Estate
  • Point Roberts, WA Real Estate
  • Port Angeles, WA Real Estate
  • Port Hadlock, WA Real Estate
  • Port Ludlow, WA Real Estate
  • Port Orchard, WA Real Estate
  • Port Townsend, WA Real Estate
  • Poulsbo, WA Real Estate
  • Preston, WA Real Estate
  • Prosser, WA Real Estate
  • Pullman, WA Real Estate
  • Purdy, WA Real Estate
  • Puyallup, WA Real Estate
  • Quilcene, WA Real Estate
  • Quinault, WA Real Estate
  • Quincy, WA Real Estate
  • Rainier, WA Real Estate
  • Randle, WA Real Estate
  • Ravensdale, WA Real Estate
  • Raymond, WA Real Estate
  • Reardan, WA Real Estate
  • Redmond, WA Real Estate
  • Renton, WA Real Estate
  • Republic, WA Real Estate
  • Rice, WA Real Estate
  • Richland, WA Real Estate
  • Ridgefield, WA Real Estate
  • Ritzville, WA Real Estate
  • Riverside, WA Real Estate
  • Rochester, WA Real Estate
  • Rock Island, WA Real Estate
  • Rockport, WA Real Estate
  • Ronald, WA Real Estate
  • Rosburg, WA Real Estate
  • Roslyn, WA Real Estate
  • Roy, WA Real Estate
  • Royal City, WA Real Estate
  • Ruston, WA Real Estate
  • Ryderwood, WA Real Estate
  • Salkum, WA Real Estate
  • Sammamish, WA Real Estate
  • San Juan Island, WA Real Estate
  • Satsop, WA Real Estate
  • Seabeck, WA Real Estate
  • Seatac, WA Real Estate
  • Seattle, WA Real Estate
  • Seaview, WA Real Estate
  • Sedro Woolley, WA Real Estate
  • Sekiu, WA Real Estate
  • Selah, WA Real Estate
  • Sequim, WA Real Estate
  • Seven Bays, WA Real Estate
  • Shaw Island, WA Real Estate
  • Shelton, WA Real Estate
  • Shoreline, WA Real Estate
  • Silver Creek, WA Real Estate
  • Silverdale, WA Real Estate
  • Silverlake, WA Real Estate
  • Skamokawa, WA Real Estate
  • Skykomish, WA Real Estate
  • Snohomish, WA Real Estate
  • Snoqualmie, WA Real Estate
  • Snoqualmie Pass, WA Real Estate
  • Soap Lake, WA Real Estate
  • South Bend, WA Real Estate
  • South Cle Elum, WA Real Estate
  • South Colby, WA Real Estate
  • South Prairie, WA Real Estate
  • Southworth, WA Real Estate
  • Spanaway, WA Real Estate
  • Spokane, WA Real Estate
  • Spokane Valley, WA Real Estate
  • Springdale, WA Real Estate
  • Stanwood, WA Real Estate
  • Stehekin, WA Real Estate
  • Steilacoom, WA Real Estate
  • Stevenson, WA Real Estate
  • Stuart Island, WA Real Estate
  • Sultan, WA Real Estate
  • Sumas, WA Real Estate
  • Sumner, WA Real Estate
  • Suquamish, WA Real Estate
  • Tacoma, WA Real Estate
  • Taholah, WA Real Estate
  • Tahuya, WA Real Estate
  • Tenino, WA Real Estate
  • Thornton, WA Real Estate
  • Thorp, WA Real Estate
  • Tieton, WA Real Estate
  • Tokeland, WA Real Estate
  • Toledo, WA Real Estate
  • Tonasket, WA Real Estate
  • Toppenish, WA Real Estate
  • Touchet, WA Real Estate
  • Toutle, WA Real Estate
  • Tracyton, WA Real Estate
  • Tukwila, WA Real Estate
  • Tulalip, WA Real Estate
  • Tumtum, WA Real Estate
  • Tumwater, WA Real Estate
  • Twisp, WA Real Estate
  • Union, WA Real Estate
  • University Place, WA Real Estate
  • Usk, WA Real Estate
  • Vader, WA Real Estate
  • Vancouver, WA Real Estate
  • Vantage, WA Real Estate
  • Vashon, WA Real Estate
  • Vaughn, WA Real Estate
  • Waitsburg, WA Real Estate
  • Waldron Island, WA Real Estate
  • Walla Walla, WA Real Estate
  • Wapato, WA Real Estate
  • Warden, WA Real Estate
  • Washougal, WA Real Estate
  • Washtucna, WA Real Estate
  • Waterville, WA Real Estate
  • Wauconda, WA Real Estate
  • Wauna, WA Real Estate
  • Wenatchee, WA Real Estate
  • Westport, WA Real Estate
  • White Pass, WA Real Estate
  • White Salmon, WA Real Estate
  • Wilbur, WA Real Estate
  • Wilkeson, WA Real Estate
  • Wilson Creek, WA Real Estate
  • Winlock, WA Real Estate
  • Winthrop, WA Real Estate
  • Woodinville, WA Real Estate
  • Woodland, WA Real Estate
  • Woodway, WA Real Estate
  • Yacolt, WA Real Estate
  • Yakima, WA Real Estate
  • Yarrow Point, WA Real Estate
  • Yelm, WA Real Estate
  • Zillah, WA Real Estate

CRS logoCRS logoCRS logoCRS logo

Copyright © 2023 | XML Sitemap | Sitemap |Privacy Policy

Designed by Om Spark LLC

Copyright © 2023 · Curb Appeal Evolved on Genesis Framework · WordPress · Log in

 

Loading Comments...