As rising interest rates have begun to price buyers out of the market, and the dark cloud of recession looms over us all, the Brevard County real estate market has started to cool down slightly. What does this mean for sellers? Unfortunately, it looks like the heyday of bidding wars, and most homes selling for way over the asking price are temporarily slowing down. If you’re an owner trying to sell your home right now, it might make more financial sense to rent it out inside. Keep reading to learn why!
Why Interest Rates Increase Rental Demand
The Federal Reserve has been steadily increasing interest rates in an attempt to cool down inflation. The downside to this approach is that it creates a double-edged sword because although rising interest rates do slow inflation, they also increase the cost of household expenses. As a result, this hinders the purchasing power of would-be buyers.
For instance, the 30-year mortgage rate in 2021 averaged around 4%. By 2022, the mortgage rate was about 6%. To put this into context, a 4% 30-year mortgage for $300,000 would have a monthly payment of $1,432 in 2021. In contrast, at 6%, that same $300,000 mortgage costs nearly $1,800 a month—a $368 increase!
Once you factor in all the other costs of owning a home, such as property taxes and insurance rates, many would-be buyers are now looking for a rental rather than a home to purchase.
How Supply and Demand Affect Landlords
When the news is peppered with stories of a potential recession, real estate sales tend to go down. Why? Because many buyers find the idea of purchasing a new house simply too risky when facing financial insecurity. Fortunately, this downturn in home sales can be good news for Brevard County landlords. As many buyers turn to renting rather than purchasing, landlords in Brevard County can take advantage of increased demand for rental homes.
Become a Landlord In Brevard County
If the benefits of becoming a landlord have piqued your interest, but the thought of dealing with finding tenants or dealing with vacancies fills you with dread, we can help! As an experienced and reputable property management company, our Brevard County rental experts can help you with every aspect of becoming a landlord and building a successful rental business.
From marketing your property to screening potential tenants, creating rental contracts, collecting rent checks, and fielding maintenance calls, Rent In Brevard Property Management has you covered!
Don’t let your home sit on the market, drain your budget and stress you out—let your assets make you a passive income while you gain equity! Even if you’ve never considered becoming a landlord before, you can easily transition by using an asset you already have!
If you’re thinking about selling your home in Brevard County, click here to discuss your options with one of our property management specialists first— you might learn that renting your home out makes more financial sense!