2013 was the year of housing recovery, as well as the year of historically low vacancy rates for rental properties. As the overall economy continues its recovery in 2014, housing prices and interest rates are expected to keep rising. On a local level, Tucson and Southern Arizona experienced significant gains in 2013, with December showing the most promising improvements since 2007. Sales Volume, Units Sold, Median Sales Price, Average Sales Price and Inventory of Listings were all up between 4% and 16% in 2013, while Foreclosures were down by a whopping 40% for the year – the lowest level since 2007. All factors combined indicate a positive trend for housing in 2014. “As more Americans, especially the Millennial Generation, are able to secure employment and better jobs, we expect there to be a movement out of their parents’ houses and temporary living situations, into rental properties,” said Kirk McGary, CEO of Real Property Management. According to some estimates and United States Census data, around 31 percent of 18-34 year olds in the U.S. lived with their parents in 2013, 44 percent of which did not have gainful employment. The U.S. unemployment rate hit a five-year-low this January to 7 percent amidst continued strong job growth, signaling that things will be turning around financially for many Americans and thus improving living standards. As for Americans looking to buy in the coming year, new mortgage standards set to take effect in January and rising interest rates will make it more difficult to secure a mortgage in 2014, meaning many will continue to rent. This combination of trends creates a unique opportunity for investors looking to expand their portfolios. “Quite a few families were burned by foreclosures and bad mortgages during the housing crisis, the result of which is wariness on both sides of the equation,” said McGary. “You have lenders being cautious and individuals being cautious of borrowing large sums again.” “We’re going to see some demographic and supply and demand shifts within the rental market in 2014, but all in all, the market will remain strong for investors and stakeholders,” added McGary. Real Property Management Rincon is the Trusted Leader in Tucson Property Management. For more information on upcoming investment seminars and investment opportunities in the Tucson area, contact us today at 800-639-9830.
As the economic recovery continues to build in 2014, Americans are again able to invest. And with recent reports from the U.S. Census Bureau noting 34 percent of American households are rental units, investors are taking notice of the benefits of placing investment funds in residential rental properties. “Investor demand for single family properties remains strong,” said Kirk McGary, CEO of Real Property Management, citing a recent study from Zelman & Associates that found investor demand for residential properties ranking at 60.9 on a scale of 0-100. “Trends like this in the housing market have created significant demand for property management companies like ours, as investors choose to put their money in real estate as opposed to the alternatives.” Although there are many investment options available, real estate offers the ability to finance a portion of the purchase price to leverage the initial investment to control an asset valued much higher – unlike stocks, bonds and CDs. With lower interest rates available, a small increase in the value of a leveraged property investment can carry a greater return than an unleveraged investment - approximately 12% according to the same study by Zelman & Associates. Investing in real estate also offers tax benefits, where earnings from CDs, bonds and stocks are taxed. By making deductions from the profit on mortgage interest, cost of property repairs and depreciation, owners are writing off depreciation of an asset that is actually providing increased yearly benefits on a long-term investment. Most importantly, ownership of real property puts more money in the investor’s pocket. Consistent rental income creates positive cash flow, thereby covering the mortgage, home repairs and other homeownership costs. Being able to minimize tenant turnover through professional management also reflects on the bottom line, maximizing the Return on Investment. As investors spot benefits derived from real estate investment through financing options, tax deductions and improved cash flow, industry leader, RPM Rincon offers services to make property management seamless for investors. Re-engineering the business with proprietary systems, the nation’s leading property management company has mastered every aspect of the property management lifecycle to give investors a predictable return on their real estate investment. Real Property Management Rincon is the Trusted Leader in Tucson Property Management. For more information on upcoming investment seminars and investment opportunities in the Tucson area, contact us today at 800-639-9830.
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