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The best time to invest in the real estate market was a decade ago when the market collapsed, and investment properties could be purchased at a fraction of their value. While no one wishes for another collapse in the housing market, landlords and prospective landlords are often wondering when is the best time to purchase an investment property. The answer? Today.  

In the fourth quarter of 2019, the cost to rent in America approached that of the cost of purchasing a home. On the surface, that data may seem concerning to landlords; low mortgage rates and high rents are a recipe for people to finally leave their renting years behind and opt for purchasing their own home.

A Different Reality

However, the reality is different than you’d suppose. According to a Freddie Mac survey in 2019, more renters than ever before say that renting is cheaper than buying. As many as 82% view renting as the more budget-conscious option, which is up 15 points from 2018 and an all-time high for the survey.

What’s interesting is that renters actually spend more of their income on housing than buyers. So, if rent is approaching the price of ownership –– why aren’t more doing it? On top of the decades-old misconceptions of down payments, the new reality is many millennials and Gen Xers find themselves grappling with how to pay for their student debt and the rising cost of childcare.   

Impact on Landlords

Currently, mortgage rates are sitting at near-record lows, making it the perfect time for landlords to expand their investment property portfolios or refinance existing properties. Low interest rates and high rent prices is a recipe for increased profits in the short and long term for savvy landlords.  

Where to Invest and Purchase an Investment Property

While interest rates are low across the nation, some markets are more attractive to those looking to purchase income properties. Many markets have a lot of for sale signs, but very few units for rent –– this is precisely where you want to invest and turn a property into a rental. This is most easily found in smaller, less saturated markets –– but no matter where you live, there are likely neighborhoods or surrounding towns and suburbs ripe for new rentals. 

 According to LendingTree, twenty out of fifty metro areas had lower median monthly mortgage payments than rent. While this doesn’t include down payments, it is encouraging. As a current homeowner, you know that down payments are not as unattainable as many believe.

In these markets, with low rental inventory and low cost of homeownership, you’ll find yourself an excellent business as a landlord. You’ll be able to increase the rent you charge based on sheer supply and demand. You’ll also turn a higher profit because of the reduced mortgage rates, making a buyers’ market a perfect time to be a landlord.


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