If you want to start investing in residential real estate to rent out but have discovered that you are priced out of the market in the city where you live, then you should consider investing in rural homes. In addition to lower prices, rural homes offer many advantages for new real estate investors, including each of the following:
Lower Yearly Property Taxes
When you purchase lower-priced real estate, the yearly property taxes will be a lot less. This is a nice aspect of rural property investing because it allows you to rent a home for less money each month than you would need to in the city where your yearly property taxes are significantly higher. As an added bonus, you can pay the government less of your hard earned money each year and that's always a bonus.
Higher Rents Due to Lack of Inventory and Lower Crime Rates
It may seem counter-intuitive, but rents for lower end real estate in rural areas is often fairly expensive based on comparable properties in larger areas. The reason for this is two-fold:
- lack of inventory
- lower crime rates
Since there are only a few homes in a given rural area that are for rent, you can charge a higher rate than you might think. Even though the wages in rural areas are lower since housing is hard to find it is often more expensive. In addition, there is less crime in rural areas and this is also a factor when you set your monthly rent rate.
Lack of Competition from Other Real Estate Investors
Another reason that investing in rural rental homes is a wise move for new investors is that there is little competition from other property investors. While all of the other investors are in the city buying up more expensive properties, you can buy up a nice stable of homes to rent out in a rural area.
Since there are not as many investors in rural areas, you will soon find that real estate deals will come to you. As the local real estate agents start to hear your name and see your purchase transactions, they will contact you when a good property comes onto the market.
You Get the Chance to Improve Rural Properties and Support Community Growth
Finally, when you choose to buy rural properties as rentals, you get the chance to improve them and help support growth of the community. This will make you feel good and can help bring new potential deals to your door.