Is Now a Good Time to Invest in Real Estate? (2025)

It’s been a difficult few years for real estate investors. Is now a good time to invest in real estate, or should you wait it out for another 12 months? Keep reading to find out! In this article, we’ll share the pros and cons of investing in the 2025 housing market, the best real estate investments for beginners, and everything you need to know before you start!

Summary:

• Home prices and rental demand will increase in 2025, while mortgage rates will hold steady.

• With less competition, there will be more opportunities for investors who are ready to buy.

• Turnkey rentals, new builds, and house hacks are the best beginner real estate investments for 2025.

Is 2025 the Time to Buy?

Despite inflation and high interest rates, 2025 is shaping up to be a good year for real estate investors. Homeownership continues to be unattainable for many Americans, so if you have the means to invest in real estate, you stand to benefit from less competition and higher rental demand. Here’s what you should look out for in 2025:

1. Home Prices Will Rise

The housing market came to a halt in 2024. While you should expect a little more seller activity in 2025, resulting in a modest uptick in home sales, it won’t be due to lower home prices. The median home sale price is set to rise this year, with Redfin predicting a 4% increase.

2. Many Homebuyers Will Become Renters

With home prices climbing, the dream of homeownership is creeping out of range for many Americans. Some people who thought they would be buying homes in 2025 will put off their plans for another year and end up renting instead, especially since rent rates are expected to stay flat this year.

Take advantage of growing rental demand with a turnkey real estate investment!

3. High Mortgage Rates Will Curb Competition…for Now

Lower mortgage rates were teased in late 2024, but rates had quickly returned to the high-6% range by November. There will be similar fluctuations in 2025, but don’t expect rates to decline significantly this year. This combination of high rates and home prices will keep many potential homebuyers on the sidelines for another 12 months.

What Does This All Mean?

With home prices on the rise, renter demand growing, and interest rates holding relatively steady, there is a clear window of opportunity for investors in 2025.

If you buy today, you’ll benefit from less competition and more would-be homebuyers turning into renters—especially once new construction slows down. Then, when rates finally drop, your property value could jump. On the other hand, if you wait for mortgage rates to drop before buying, you’ll have to compete with an influx of homebuyers and will likely pay up for your rental property!

Invest the easier way with professionally managed turnkey rental investments.

Pros and Cons of Buying in 2025

Those who invest in 2025 could come out on top, but there is no guarantee. Make sure you carefully weigh the real estate investing risks and rewards of buying a property in this housing market.

Pros

Several factors are working in favor of real estate investors in 2025:

Rising Rental Demand 

With more would-be homebuyers opting to rent, landlords will have a large tenant pool to choose from in 2025. What’s more, this increased rental demand could lead to rent growth in the years ahead!

Rising Home Prices

Home prices are climbing steadily with no sign of slowing down. Buy your investment property today, and you could enjoy several years of high appreciation. 

Low Competition 

As mortgage rates continue to hang around the 6%-7% mark we’ve become accustomed to in recent years, competition will remain low. The combination of slower market conditions, longer listings, and fewer bidding wars means you’re more likely to get a property for the price you want.

Low Housing Inventory

Don’t hold your breath waiting for new inventory to hit the market. The US is experiencing a housing shortage—one that may not be fixed for many years, if ever.

Low-Money-Down Loans

With low-money-down loans, you don’t need to save 15%-25% for an investment property down payment. Rent to Retirement offers 5%-down loans for build-to-rent properties!

Cons

2025 might seem like an ideal time to buy real estate, but there are a few drawbacks to keep in mind:

Interest Rates Are Still High

Currently, debt is expensive for investors, but this also keeps competition and home prices at bay. Buying at a high mortgage rate might mean you take on a higher monthly payment today, but when rates drop, you can refinance and lock in a lower rate!

Repair/Maintenance Costs Are Rising

Inflation has caused material costs to rise, which directly affects your property maintenance and repair costs. With a build-to-rent investment, your maintenance costs stay low!

Novice Landlords Won’t Cut It

With apartment complexes giving concessions to get new tenants in and keep old tenants renting, you need to be a great landlord to do well in 2025. Thankfully, Rent to Retirement’s turnkey rentals have professional property managers, so you and your tenants have great experiences.

Best Beginner Real Estate Investments for 2025 

If you’re just getting into real estate, here are three beginner-friendly investments you should consider:

1. Turnkey Rentals

A turnkey property is a newly renovated or newly built rental that comes with management and tenants already in place. This is the perfect investment for a beginner, as it provides all the benefits of active investing without the headaches of finding tenants, collecting rent, or maintaining the property!

2. New Build Investments

A new build is a recently constructed home that has lower maintenance costs and higher rent potential than an older property, making it a great first investment. Rent to Retirement has new builds that are not only turnkey but also listed at below-market prices!

3. House Hacking

House hacking is the process of renting out part of your home while living in it. It’s one of the best strategies for new investors, as the rental income can help cover your mortgage. What’s more, buying an owner-occupied property gives you access to low-money-down financing and often lower interest rates.

Tips to Start Investing in Real Estate 

Ready to invest in real estate in 2025? Here are some crucial tips to get started:

Know What You Can Afford First

Don’t shop for $500,000 homes when you can only afford a $300,000 home! Rent to Retirement has relationships with lenders across the nation that can help determine your purchasing power and get you into your next investment property.

Lean on Professionals

You don’t need to be a real estate expert to start investing. Professional property managers, turnkey providers, and investor-friendly agents work hard so you can invest with great success while learning the ropes!

Keep a Safety Reserve

Don’t empty the piggy bank for one investment. You’ll need enough money left over to cover maintenance, repairs, and daily life. Rent to Retirement can help keep more money in your pocket with their 5%-down new build investment loans!

So, Is Now a Good Time to Invest in Real Estate? 

Yes! While high home prices and interest rates are deterring many Americans from buying homes, this is a great time for investors to get in the game. You’ll face less competition when looking for your next property, and once you close, you’ll have a large tenant pool to choose from, thanks to the recent shift in rental demand.

Don’t wait for lower mortgage rates and increased competition. Buy now, refinance later, and in the meantime, take advantage of long-term appreciation!

Is Now a Good Time to Invest in Real Estate FAQs

Is Real Estate Investment a Good Idea Right Now?

While the combination of high home prices, low inventory, and unpredictable interest rates have made it harder to find great deals, it is still a good time to invest in real estate due to lower competition and a recent shift in rental demand.

Should I Buy a House Now or Wait for a Recession?

Historically, it has been a good bet to buy real estate during a recession, but it’s difficult to forecast when a recession might arrive and how you might be affected by it. If you have the means to invest in real estate today, you can buy now and refinance when interest rates drop.

What is the 1% Rule in Real Estate?

The one-percent rule states that a rental property’s monthly rental income should be at least one percent of the purchase price. This rule is outdated, largely because it doesn’t account for rent growth, appreciation, expenses, and other factors. Try our cash flow calculator before you buy!