Top reasons to invest in single and small-family rentals

by Ryan Rose30 May 2019

The ever-changing investment landscape continues to allow for new opportunities in the rental property industry. Small and single-family rentals offer significant benefits to investors in markets across the country, according to a blog post by CIVIC Financial.

Since 1985, this market has seen a national average increase of 2.8% with top markets such as Phoenix, Atlanta, Tampa, and Dallas seeing increases from 12% to 13%. Small and single-family rental returns are comparable to stock investments but with far less volatility, outperforming the bond market while remaining a steady rental asset class, CIVIC Financial said.

The dynamic opportunities in local markets are also creating pockets of job growth, even in smaller markets. Tampa, Fla., Tempe, Ariz., and San Antonio, Texas are heating up as the rentals become a significant source of income for prepared and enthusiastic investors.

One reason for these shifts in the market is because owning a home has outpaced the cost of renting, according to Realtor.com. The cost of owning a residence is up 14% in July 2018, while the cost of renting for the same period rose only 4%. Only 35% of the nation’s counties saw buying as a cheaper option than renting.

The time to invest in real estate can be tricky. Ideally, the best time to buy is when prices are low – but the sooner you get in, the sooner you can enjoy the cash flow of your investment. The small and single-family renter market has a bright future, as the rental market represents 16 million households with an increase of 13 million by 2030, when renter households will outpace owner households by 4 million. There are small and single-family rental properties for every budget and investment parameter, allowing anyone the opportunity to grow their investment profile.