Investing in real estate has certain advantages over other types of investment, and now might be a perfect time to consider putting your money into a great Seattle rental property. You'll have an ideal opportunity to enjoy a positive cash flow while creating equity in your property. It’s is a win-win situation - but only if you know how to choose a Seattle property that will stand out, stay occupied, and generate the most income. To help you do just that, we've prepared tips for buying a rental property in Seattle. And in case you're still having doubts, we'll let you know if now is a good time to buy an investment property in Emerald City.
Is now a good time for buying a rental property in Seattle?
Any investment comes with risks, and so do real estate investments. Therefore, before buying, it's essential to research the current market and determine when is the right time to make that move.
When it comes to Seattle, despite relatively limited inventory, the tremendous demand caused by growing employment prospects offers real estate investors plenty of appealing options heading into 2022. In the Seattle and Tacoma areas, there's a surge in condominium sales and a rise in their value.
The other reasons that drive the Seattle real estate markets are construction and redevelopment prospects, investor demand, expected net migration, job density, and an overall healthy economy. Add an abundance of job opportunities and great universities to the equation, and it's no wonder why so many people are deciding to move there.
Because mortgage interest rates remain low, real estate sales are expected to be strong in 2022. Seattle attracts more than its fair share of young professionals and appealing renters. In a report from 2021 done by The Urban Land Institute (ULI), Seattle ranks 34th on the list of rental markets to monitor, with growth roughly a standard deviation above the national average.
Do keep in mind that ULI's report also concludes that demand will remain high and inventory low. This means that you will face some competition. However, the potential rewards for investing in a Seattle rental property might be too enticing.
Tips for buying a rental property in Seattle
From everything we've mentioned above, you'll have to agree that investing in a rental property in Emerald City sounds like a great option. However, buying a rental property can get complicated, so we've prepared tips to help you go through this process smoothly.
Sort out your financing
No matter what type of property you're looking to buy, the first step is always the same - determine your budget and figure out your financing. Only when you know how much you can afford can you truly start looking for a property in Seattle to invest in.
To finance an investment, you'll typically need to put down at least 20%, with "excellent" interest rates available after you put down 25%. The good news is that mortgage rates are expected to remain low. However, this doesn't mean you should pick the first lender you find. Instead, get offers from several and choose the one that fits best into your current financial position.
Do a thorough research
Even after you figure out the financing part, you don't want to rush and instantly start searching. Before you reach out to Beth G Homes real estate team and start attending open houses, make sure to know what you're looking for.
This will not only save your and your real estate agent's time but will also help you get valuable information. If you thoroughly research everything about Seattle rental market, you'll make an informed decision and ensure you make the most of your investment.
Choose a type of rental property
One of the things you should also consider is the rental property type you'd like to purchase. Here are the types you can choose from:
● Condos are generally much cheaper than houses or townhouses, so investing in one is a great way to start your investment journey. On top of that, they're also low-maintenance. Still, if you want to buy a condo in Seattle, make sure that the building doesn't have a "rental gap".
● Another option is to invest in a house. Even though you can generally charge more and the tenants are more likely to stay longer, maintaining a house is a lot of work.
● Townhouses are sort of a golden middle between condos and houses. They can be relatively affordable. And, as they're newer, don't require much maintenance, and are not limited by rental restrictions like some condos.
Choose the right neighborhood
Another important thing to focus on is finding the right Seattle neighborhood. After all, when it comes to rental properties, location is crucial. Here are the most popular Seattle neighborhoods for renters:
● Located in the central business district, Downtown has a lot of touristy charm. It's popular with professionals and living here comes with a slightly higher than average rent.
● Quite a few new residential developments have been built in Northgate in recent years. It comes with easy freeway access and lower rent.
● Ballard is a neighborhood primarily popular among families and beer lovers. Namely, there are nearly a dozen craft breweries in the area. However, the rents here are much higher than the average, so you might have trouble finding tenants.
No matter which Seattle neighborhood you choose, you can be sure that getting your rental ready for the market will be very easy. There are professional services to help you every step of the way - from experienced movers to reliable property managers. As many find this helpful, you might have reasons to rent portable storage or hire a cleaning service. Whatever you need - you can count on finding it in this city!
Hire a great Seattle real estate agent
Lastly, make sure to get in touch with Seattle's real estate professionals. This is especially important if you are buying from a different state. You'll need someone with extensive knowledge and experience with Seattle real estate market. A local real estate agent will understand what you want from this property and know what to look for. Also, they'll have crucial information about the rental market, too.
The bottom line
As you can see, buying a rental property in Seattle doesn't have to be complex. Remember, the key is in arming yourself with patience and doing thorough research. But most importantly, make sure to find a knowledgeable and experienced Seattle real estate agent who will be your right hand during the process and help ensure you don't make a huge mistake. Best of luck with your investment adventure!