People who have owned real estate in North Carolina since the days prior to the housing recession or purchased around that time or became reluctant landlords with no ability to sell or refinance are always asking me if they should consider selling now. It’s an interesting question and my immediate answer is no. That piece of property that probably felt like a liability during those recession years has now switched positions and you should consider it an asset.
Right now, owning rental properties is a great investment. There are a couple of factors that contribute to this:
Rental Rates and Occupancy
Wilmington rental rates continue to appreciate at a good pace. There is now a sizeable demographic of people who are no longer interested in owning real estate, and they want to be long term renters. That has taken away some of the supply in the marketplace. This greater demand for high quality rentals has prices going up.
Occupancy rates are also at all time highs. In southeast North Carolina, in the markets we serve, we’re finding a 97 percent occupancy level for the inventory we manage. These numbers are through the roof, which is great for rental property owners.
Interest Rates
Long term interest rates are not moving too much. There was some concern awhile ago that the benchmark rate would drive up long term interest rates. However, there are global economic issues that indicate our global rates we benchmark for mortgages won’t be changing any time soon.
Owning rental real estate today is an outstanding option for people looking for strong long term returns. Take a look at real estate rates compared to the S&P 500 Index, using the benchmark for equities. It’s had a nice run since 2008, so people are questioning how much higher it can go. Real estate is a good investment alternative.
If you’ve weathered the storm, you have seen the worst of it. Now, you’re about to see the best of it. Here in North Carolina, we have high rental rates and occupancies, appreciating real estate, and of course you get the benefits of deprecation on your taxes for owning that real estate.
Additional reasons owning Wilmington investment property is a benefit:
Tax benefits
Additional source of income
Helps pay down mortgage
Retirement nest egg
Maintaining a home you might return to (Military, retirement, relocation, etc.)
Security in a down market
Real estate is one of the more stable investments over the stock market
These are some of the reasons we think you might want to hold onto your property instead of selling it right now. If you have any questions, or you need help managing your investment, please reach out to our team of property management experts today.