For Landlords, The Numbers Are Starting To Look Better


Home prices are falling, rents are tumbling, and apartment vacancies are rising. So why are thousands of small investors becoming landlords?

Because real-estate prices have fallen much faster than rents, the math of buying a rental has actually improved substantially in most parts of the country. Money invested in an apartment complex today typically generates annual returns of 7% to 8% right off the bat, up from less than 6% at the peak of the housing bubble in 2006.

If your property appreciates in value or rents rise, you could end up with double-digit annualized returns when you sell it. But higher returns usually come with higher risks. If you overpay for a rental property or you buy in the wrong market at the wrong time, you can lose a lot of money.

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1 Response

  1. Avatar Joanne Lobeski Snyde says:

    I know of no renter in Shasta County whose rent was decreased because of the economy. "Rents tumbling"? Please tell me that rents did decrease for people who have been hard-hit by the economic situation.