Everybody dreams of building wealth. Luckily, in today’s world, there are numerous ways to become rich. But is rental property a good investment to accumulate wealth? As it turns out, the one business that never falls behind is real estate investing. So, to answer the question, yes, rental property is a good investment. In fact, let us tell you about the advantages and benefits of investing in real estate.
#1. It’s Not Too Hard to Learn Real Estate Investing
Is rental property a good investment for beginners? YES! Why? Because it’s not too hard to learn real estate investing all on your own, even without a formal education. For example, becoming a landlord is one of the best ways to start in real estate investing. When you own a rental property, you begin to get involved in every single detail from buying an investment property to managing one. As a result, you’ll find yourself gaining knowledge and experience by the day. You will learn all about what it’s like to be making money in real estate. Moreover, it gives you the opportunity to start slow and gradually expand your business, thus building wealth one house at a time. And it can practically all be learned as you go. Just be sure to take the first step by getting your hands on as much information as you can (like reading real estate investment blogs!) and even talking to some experienced property investors and landlords for advice.
#2. Leverage
We can’t talk about buying rental properties without bringing up leverage. If you ask any real estate investor “why is rental property a good investment?”, they’d tell you it’s the best investment because it doesn’t take a ton of money to buy investment properties. You typically only need to provide a down payment (and pay a few other closing fees) and the rest comes from lenders. This fact helps aspiring real estate investors get started in the business knowing it can be done even on a smaller budget.
Related: Investment Property Financing: What Are the Best Options for Real Estate Investors?
#3. Constant Rental Demand
Come on! When it comes to why is rental property a good investment, it is obvious: Everybody needs a roof over their head. Rental demand won’t plummet anytime soon. It is only a matter of proper real estate market analysis to find the locations with the highest rental demand to eliminate any chance of vacancies. The lower the vacancy rates, the more money you are making.
#4. Predictability
Since we brought up the real estate market analysis, this is another advantage of owning a rental property: The market is predictable (to an extent, of course). As long as you perform proper market analysis, you should be able to predict future market trends.
The most reliable way to do so is to depend on predictive analytics. So let us tell you a little about Mashvisor’s predictive analytics. Say you want to know what rental strategy to use in a specific location but you aren’t sure which will perform better right now and in the near future. Using Mashvisor’s real estate investment tools and predictive data, you can easily determine the optimal rental strategy for a specific profitable location. As a result, you’ll ensure high occupancy rates and positive cash flow. Learn more here.
#5. Variety
Related: What Are the Best Ways to Make Money in Real Estate as a Beginner?
#6. Forget About 9-5 Jobs
Is rental property a good investment? Well, if you are sick of the 9-5 job that you have, investing in rental properties can be a great investment. You have the choice to either invest full-time or part-time while still keeping your job. This means that you can choose for real estate to be your primary source of income or a source of extra income.
Related: Part-Time vs. Full-Time Real Estate Investor: Which Real Estate Investment Strategies to Go For?
#7. Property Management Is Flexible
Now, we all know that owning rental properties comes with property management duties. Repairs, maintenance, landscaping, rent collection, legalities, and many other tasks are part of it. Considering all of this work, why is rental property a good investment? The reason is that you have a choice: you either do it yourself or you hire professional property management services. In the first case, if you have the time and the knowledge to do it, then go ahead. If not, you can go with the second option in exchange for property management fees. Either way, it is an excellent feature of real estate investing that you get to choose what works for you best.
#8. Passive Investing Is an Option
Don’t you wish that there were ways that allow you to put your money to work while you just chill at home?
Well, that is possible with rental property investments. It is called ‘passive real estate investing.’ It is a great way to go about building wealth in real estate without getting involved. As we have mentioned previously, you can buy rental properties and hire professional property managers to take care of them. You can also invest in a real estate syndication or a crowdfund and choose what projects you want to invest in while you stay at home.
#9. Real Estate Technology
Why invest in real estate, you ask. Because, now with advanced technology, your work as a real estate investor is much easier and faster. With the developed real estate investment tools available nowadays, it is easier to analyze a rental property and make a decision about buying it. For example, you have a rental property calculator. This tool will compute all the necessary return on investment metrics in a matter of moments. You also get an accurate real estate market analysis when you use it for a particular investment property. So, not only will it tell you IF you should invest in a rental property, but also WHERE to invest in one.
Related: The Beginner’s Guide to Rental Property Analysis
#10. There Is Always a Way to Increase Your Income
Aside from the property appreciation which contributes to your equity, rental properties have the potential for generating more rental income. Now, there is the income increase due to the rise in market value, and there are the things you can do that contribute to it. For example, renovating the rental property (wisely) will always result in a decent forced appreciation. Therefore, this increases the rent value. Also, if you add more services or utilities, that could also increase your rental income. Another way could be renting out on a room-by-room basis which typically generates more rental income. Or, you could rent it out on Airbnb and get paid multiple times a month.
Finally,
Is rental property a good investment? I think you can see now that it is! So, why don’t you click here to start looking for and analyzing investment properties now?