Is Rental Investment a Good Option for you?
In many areas of the country, rental properties are in some much demand that rents are once again
on the rise, causing many investors to sit up and take notice. If you have considered getting into
real estate investment, rental investing just might be the option you have been looking for.
For investors who put their money into rentals, the advantages can be significant. One of those benefits
is the ability to turn around profits much faster than was possible in the past. Also, the return that
can be achieved on rental properties is typically much better than the prospective returns available on
other investments. For investors who are tired of the constant fluctuations of the stock market, this can
certainly be good news.
Traditionally, monthly mortgage payments on rental properties were merely subsidized with the rents received.
The true profit realized on a rental investment was the appreciation in price the investor was able to
receive over time. Today, that situation has completely changed. Many investors are now able to purchase a rental
property with a 25% down payment, finance the remainder and then collect the rent each month to cover not
only the mortgage payment, but also the taxes and insurance. In many cases, even after covering those expenses
they can still have money left over from the rental receipts each month.
An increasing number of investors are viewing their rental properties as an investment that can generate income
monthly. This makes it possible to begin achieving profit margins practically instantly. As the market continues
to deteriorate, it is possible to achieve even higher profit margins.
There are several factors contributing to this phenomenon. One is the fact that interest rates remain low, meaning
that investors are able to take advantage of record low monthly mortgage payments. At the same time, renters are
not moving to snatch up deals as first time home buyers. Many consumers have looked at the housing market and
determined that the cost of owning a home overall simply isn't worth it for them. Gone are the days when people
buy a home and stay in it for the next 30 years. Renting simply makes much more sense for many people today.
Once you decide that rental investing is the right move for you, it is important to know what to look for when
searching for rental properties as well as tenants. While there are many advantages to owning rentals, the reality
is that you need to have the right tenants to make this opportunity profitable. Before making any real estate
purchase, you need to consider whether you have the time and the resources to actually be a landlord. You need
to recognize that you will need to work at it to ensure your rents are paid on time and you will also need to be
able to deal with the situation if you have a tenant that doesn't pay. That means you must be able to effectively
evict tenants if the situation calls for it. At the same time, you must recognize that you will be responsible for
maintaining the property.
Research is also crucial in rental investments. Spend some time finding out what the going rents are in your local
area. You also need to find out what the average vacancy rate is and how much it is going to cost you to finance.
Also, do not overlook the other costs associated with actually owning a property, such as maintenance, insurance
When searching for possible rental investment options, remember that location can be critical. Renters like to be near
public transportation, good schools and other amenities just as much as someone who is looking to buy a primary
residence. In addition, purchasing properties near military bases and colleges can also be a good idea. Consider
the crime rate of the local area. Renters want to ensure the area they are living in is safe; particularly if they
Overall, right now is one of the best times to become a landlord in a long time. Around the nation, rental prices
are expected to increase by 5% this year alone and potentially another 5% over the course of the next year. This
trend is even more pronounced in certain areas of the country, particularly in Florida and Southern California.
The simple fact is that many consumers have made the decision they are better off renting for a variety of reasons.
That combined with record low interest rates and housing prices has created an extremely attractive opportunity for
prospective investors and landlords.