Solid rents make investment homes a ‘sweet spot’

Low mortgage rates coupled with solid rents have made investing in a rental property pay off for investors.

Many investors have eyed foreclosures, snagging them at rock-bottom prices, and turning them into rentals. Some homeowners have also used the downturn in housing to purchase second homes and then rent out properties, the Associated Press reported.

Demand for rental housing remains strong. “In this market, at this point, it’s a sweet spot,” says Chris Princis, a senior executive at financial advisory firm Brook-Hollow Financial. “You’re getting the market where it’s just starting to rebound, but still at the bottom, with what’s looking to be a great recovery.”

The best investments for rentals typically prove to be in areas with a strong history of rental demand, such as neighborhoods near universities or homes in residential areas that are near schools to attract families.