Long Term Rentals
Why Long Term Rentals?
Long-Term Rentals can be a steady way to grow your return on investment over time. In Bellingham, over 50% of the residents are renters, so there are plenty of potential clients for rental properties in the area and throughout more-populated areas in Whatcom County.
What’s great about owning a long-term rental? In addition to having more-predictable income than their short-term rental counterparts, long-term rentals provide both market value appreciation on the initial investment plus growing cash flow. Let me give you an example:
Let’s assume both monthly rent and market value grow at 5% per year. Although these numbers can actually decline, according to Credit Karma, the national average annual rental increase between 2017-2022 was 5.77% (although locally our increases were higher) and according to information derived from NWMLS, Whatcom County median sales prices increased an average of 12.2% per year between 2017 and 2022. But for this example, let’s use 5% for both to be conservative. Let’s see what happens to the market value of the property and rent over 10 years:
| Purchase Date | Year 1 | Year 5 | Year 10 | |
| Market Value | $500,000 | $525,000 | $641,679 | $823,505 |
| Monthly Rent | $2,000 | $2,100 | $2,567 | $3,294 |
Holding on to this rental for 10 years has allowed the value to grow by $323,505 and the monthly rent to increase by $1,294. Considering the investor may have only put down $100,000, that is a return of 223% on the initial investment on the market value growth alone!
Intrigued? Read more by downloading my ebook below.
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If you like what you see and are ready to start discussing your long-term investment strategy and buying your first investment, reach out. We can run some numbers, take a look at current opportunities to get a feel for what is out there and refine your goals.
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