The Outer Banks needs Long Term Rental Investors!
Rental rates have increased faster than inflation in 2018 according to Business Wire, a division of Berkshire Hathaway. We have definitely seen this to be the case on the Outer Banks but many are wondering if it is supply and demand or green on the part of Landlords. Now is also a very good time
for investors or those who are considering the Outer Banks to retire to later in life.
Purchasing an investment property here now while the prices are lower and letting us lease it out for you for 5 years or so can really offset the cost of the investment.
1. OBX Rental rates will increase faster than inflation
The average rental rate for a three-bedroom single-family residence averages from $1350 to $1600 per month plus utilities. The supply of single-family rentals on the Outer Banks is declining and the popularity of the long term, year-round residents here is growing. Meanwhile, the consumer price index is growing too and is expected to exceed 2 percent. This opens the door for rental rates to increase.
2. OBX Vacancies are pretty much non-existent
When we have a home become available it takes less than 24 hours to have multiple inquiries and sometimes Rental Applications received on the property. We keep a waiting list of almost 100 people on it who the information goes out to first before we put the property online and through our extensive internet marketing program.
3. Mortgage rates will increase for first time home buyers
The Federal Reserve keeps announcing rate increases. It is extremely likely that additional increases will be made during 2019. That means mortgage rates in the 4.5% range will disappear and we can expect to see them in the 5% range for a 30-Year fixed loan.
4. Foreclosures will remain at a low level
The seriously delinquent rate for foreclosures is currently 2.6 percent – the lowest level since August 2007. Barring a shock to the economy, we expect foreclosures to remain low in 2019. This will make it more challenging for investors to find deals.
5. House prices will increase faster than inflation
The national home price increased 5.39 percent through September 2016 and is now $274,000. However, housing prices have not yet returned to their 2007 peak. With an improving economy, it is likely housing prices will continue to grow. As mortgage rates increase, many homeowners who previously