Renovate to Rent… (Not Flip!): 3 Reasons to Become a Landlord Now
It seems like there are countless television programs that have gained enormous popularity in recent years that are focused on the popularity of fixing and then later “flipping” homes for a profit. A business of this type can be lucrative, but there are also ample reasons to also consider a different approach: Renovate to Flip Rent.
With Phoenix being reported by AZ Big Media as the No. 2 housing market in the nation for 2021, there are most certainly pools of investors, as well as individual proprietors, who are looking to cash in on a growing revenue model in a city that boasts one of the hottest markets.
But does it make more sense to play the long game here by instead investing in properties for ownership, renovating them and leasing/renting them out? We’ll take a look in the points ahead.
1. The Housing Market in Phoenix Has Never Been Hotter
Housing markets can cool off. But according to Zillow’s Home Price Expectations Survey for 2021, Arizona’s isn’t cooling off any time soon. In fact, 69% of a panel of economists interviewed by Zillow to gather data and predictions say it’s expected to outperform the national average throughout this year and beyond.
With more than 200 people moving to Phoenix every day, rental units are becoming scarcer. With supply and demand also comes opportunity for a landlord to invest in real estate now, gain in equity over time, and rent it out for a profit in between.
2. Market Value Gains Are Set to Continue
Look beyond 2021, especially if you’re considering long-term rental units against equitable gains in land value, offset by profits after maintenance costs.
According to Wallet Investors, Phoenix home prices/values are expected to increase by at least 18.5% over the next ten years. That’s a pretty healthy return on investment for any landlord who is playing the long game—especially when you consider that with each rental payment, you’ll also be generating a profit.
3. It’s a Landlord’s Market
We’ve mentioned above that home prices are on the rise, that the Phoenix market is one of the hottest in the nation and that hundreds of people are moving here daily. What does this all equate to in the end: It’s a Landlord’s market!
Those who buy in early have the potential to reap the long-term rewards of a smart investment later on. Given the current predicament of the pandemic, and how much closer things are to returning to “normal” on a personal and on an economic level, now could very well be the right time to invest in the future of real estate while opportunity is still knocking at the front door and bypassing the Ring doorbell altogether.
M&G Can Help!
The purchase of a home or any real estate to renovate and rent requires the experience and knowledge of a real estate attorney to make the best decisions possible in the transaction and any related contracts in the interim and the aftermath. The attorneys at M&G Law can help you structure the best way to purchase the home you wish to renovate, including helping with contracts for renovation and the leasing contracts afterwards. Contact us today at 602-726-2229 or make an appointment on our contact us page online.