Is Owning Rental Property the Right Choice for Me?

owning rental property
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Owning rental property is rewarding and builds your wealth. In 2016, 65% of Americans under 35 years of age were renting an apartment or home. That number is expected to grow over the coming years.

But it’s not for the faint of heart.

Before you start purchasing random properties to flip and rent, there are a few things to know about this industry. Owning rental property requires a little elbow grease, commitment, and knowledge.

Here’s what you need to know to decide if it’s the right choice for you!

Owning Rental Property is a Good Investment

The up-front costs of purchasing a house or building may sound expensive. However, many rental property owners borrow money and can use their property as leverage. You spend less money up-front buying a rental property than you do when buying stocks, for instance.

Owning rental property allows you to directly manage your investment. You’re the one who inspects properties, decides rent costs, and personally manage your property. There’s no middle-man, board, or managers micromanaging your investment.

Be Ready for a Little Manual Labor

Finding and purchasing rental property is only part of the rental property journey. You can buy a property and rent it “as is” but you’re less likely to attract good tenants and make a profit.

Owning a rental property means you’ll have to put a little blood, sweat, and tears into your rental for the best return on investment. After inspection, you’ll need to clean up the building, both inside and out.

A few things to fix up and replace are appliances, windows, carpet/floors, wall paint, and cleaning. Your rental property must be up to code regarding fire and building safety. Presentation and safety are crucial when advertising your property.

You can do many minor renovations yourself to save money or hire a contractor to assist you with more invasive renovations.

Owning Rental Property is More Stable than You Think

Everyone needs someplace to live. Even in the toughest of economic times, you’re sure to find tenants and continue making a profit on your rental property.

Watch the rental and housing market in your area. Keep rent within reason and plan for long-term gains rather than making a quick profit right away.

Calculate your rental property ROI by factoring in monthly rental income, mortgage, change in property value, taxes, insurance, and other potential costs. This may seem like a lot at first, but over a short period, you’ll start seeing a profit.

Let’s Get Renting

While owning rental property doesn’t make you wealthy right away, it’s a great long-term investment. If you prefer managing your investments directly and don’t mind a little hands-on labor, owning rental property is the right choice for you.

Have questions or want to get started today?

Let us know! Our agents are ready to help you make your rental dream a reality.

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