You may have considered venturing into the world of real estate investment yourself, and are drawn to the idea of becoming a rental property owner.
Younger people appreciate the flexibility that renting offers, and tend to delay life decisions that may precede buying a home, such as marriage or starting a family.
The resulting trend is that millennials are staying in the rental market through their 20s and mid-30s.
With renter households growing at a faster rate than owner households, landlords are at an advantage in the rental market. With the current investment potential of real estate, you may want to take a good look at the benefits.
There are several benefits to owning a rental property, one of the main attractions being that it can provide a source of passive income. For some landlords, pride of ownership may be part of the allure. It can be rewarding to be able to confidently manage and make decisions concerning the property you own. Others may be more interested in the monetary benefits as well as the security of owning rental property.
The key to success as a beginner rental property investor is learning how to assess the value of properties, choosing the right location, understanding market conditions, and most importantly, finding great tenants. If you meet these criteria, you can be better prepared to reap the benefits of owning rental property.
Here are a few perks to becoming a landlord:
1. PASSIVE INCOME SOURCE
Perhaps the biggest benefit to owning rental property is that it’s a passive income source. This means that it is recurring income that requires relatively little effort to maintain. It can be an attractive option for people looking to make some money on the side, or even as additional financial security during retirement. Additionally, rental income may be taxed differently than employment income.
Of course, you’ll want work out all the cash flows before investing in rental property. In order to better ensure that being a landlord is more likely to be profitable for you, you’ll need to factor in all your expenses. Once you have an idea of your cash flow, you’ll want to assess whether the numbers suggest you’re likely to be able to make a consistent income on the property before purchasing.
2. GREATER SECURITY
Some people have to make a temporary move for work. Others inherit a family home that they don’t want to sell for sentimental reasons. There are a variety of reasons that people may find themselves with an empty property. A vacant home is potentially left open to vandalism and squatters, and maintenance issues gone unnoticed that can quickly escalate into larger problems. It’s hard to always keep an eye on a home you aren’t living in. Renting the property out to tenants can give you greater peace of mind that the home is being maintained and watched after.
3. FLEXIBILITY TO SELL AT THE RIGHT TIME
Say you’re ready to move, but the market conditions aren’t the best. Rather than selling your property for a loss, you can rent out your property until market conditions improve. Renting out your property gives you the flexibility of selling once you’re in a better position to make a profit off your property.
4. OPTION TO MOVE BACK
You may find yourself unable to stay in your current residence due to financial or other reasons. If you need to make a temporary move for a job, it’s nice to know you’ll have still have a place to live when you return. Of course, you’ll want to check your state and local housing laws and respect the terms of your lease with any current tenants.
5. PROPERTY VALUE APPRECIATION
Renting out your property now allows you to hold onto your property in case it appreciates, giving you the option to sell when the time is right. The amount of appreciation is going to vary by market. Research the appreciation potential of different cities and neighborhoods to see what you might be able to expect.
6. DIVERSIFICATION OF INVESTMENTS
owning rental property allows you to diversify your portfolio, which can serve as an added layer of protection against risk. It can also potentially help you take advantage of positive market swings.
You can see some apartments on sale here