The Coronavirus pandemic has brought about numerous changes. One of these is record low mortgage rates – and because of that, the U.S. housing market has been on the rise. In fact, as of mid-August (2020), sales of existing homes jumped by roughly 30%, following a three-month slump, and leading to a seller’s market.
Housing prices are going up in many of the major United States metro areas, as people are seeking added space in order to more comfortably work and learn from home, as well as to obtain more yard space to enjoy outdoor activities.
Is Now A Good Time To Purchase Additional Rental Properties?
With that in mind, even with the average 30-year mortgage rate under 3%, is now a good time to purchase additional rental properties and add to your real estate portfolio?
The answers is, it depends.
For example, even though low interest rates can make the monthly mortgage payment easier to swing, home buyers – including investors – may also be forced to pay a higher price for the property.
Then there is the issue of whether or not tenants will be able to make the rent payment. The CDC issued a nationwide ban on evictions that is now slated to last through the remainder of 2020. And, while the previous law covered only certain types of properties, the new one protects anyone who is living in one of the U.S.’s 43 million rental households.
So, for some investors, it could make sense to wait on the purchase of additional units. In any case, though, running a rental property business can be time consuming. If this describes you, it could be time to consider working with a professional property manager who can take on the tasks of maintaining property and managing tenants.