Loan Amount: $100,000
Loan term: 6 Months
Property Type: SFR
Loan Type: Buy and Hold
Capital Fund 1 closed this buy and hold loan in Avondale recently. Our borrower saw that the rental market in the west valley was growing, especially in cities like Surprise and Glendale. Choosing to purchase a buy and hold property to lease out was a smart investment choice for this borrower.
Purchasing a buy and hold property does require quite a bit of thought and time, just like when looking for a home for yourself. You’ll want to make sure it is in a good neighborhood, that the interior features are in good condition, and you’ll want something that has the potential to increase in value over time, as well as something that makes sense financially to rent out. And it turns out that this property fits the box for our borrower.
Increasing Property Value
As you can see in this image from the Cromford Report, Avondale’s average sale price per square foot has been increasing gradually over the past 12 months, with seasonal peaks and valleys. This is a good indicator of the market being more desirable and needing to adjust it’s pricing to the increase in demand.
With values of homes increasing, it is also keeping some potential new home buyers seeking to live in a rental property as opposed to venturing into home ownership, as shown in renterswarehouse.com. Many may be choosing to save up for that down payment or may even see renting as a better alternative to a monthly mortgage. From a real estate investor standpoint, that can mean that finding a tenant won’t be difficult and the option to provide rent to own might even be on the table.
By owning a rental property in an area where the value of homes are increasing, you could also anticipate rents to increase every year.
Avondale had one of the largest Year over Year increases in average rents, with rentcafe.com stating that there was a 10% year over year increase in average rents. In addition to the rent increase, the trends indicate a positive growth that will likely continue in 2018.
So whether you’re planning to start your real estate investment journey or already have a portfolio of investment properties together, let Capital Fund 1, LLC help you reach your 2018 real estate investing goals! Give us a call today and see how we can help today!