Is it the time to invest in a rental property? Before answering the question, you need to ask yourself two questions.
1. Will the rental property have a positive cash flow.
2. Does your new rental property in an area have an appreciation potential?
If you have YES for both questions, it is a buy! But actually, the answer is not that simple. You need to look at your area of population growth, job market, school, etc.
You are buying a property for investment, not flipping. I will not worry about the price based on what so called expert saying. At this point, it is a buyer’s market. The reason being is for the past 10 years, we have enjoyed the low mortgage rates fueled by Federal Reserve Bank interest rate policy. As the economy recovers from the 2008 financial crisis, under the Trump administration’s pro-business policy, we have seen our current GDP growing at around 3% annually. With a strong economy, Federal Reserve Bank has been raising the interest rate for the past two years, which translates to higher mortgage rates. That is why we are seeing housing transactions coming down in some areas in the US due to higher mortgage rates. I think that the real estate markets are going through an adjustment period.
Reality is that we have not built enough housing for population growth because most of us including developers were scared by 2008 crisis. Now we have this good economy and the housing demand is still there. Once Federal Reserve Bank stabilizes the rates, you will see housing market becoming active again!