Many people willing to pursue a real estate career are wondering what the best real estate investment strategies are. Certainly, there are many possibilities to choose from. For instance, short term rentals, long term rentals, buy and holds, fix and flips and so on and so forth. Many real estate investors consider investing in long term rental properties as the best investment there is. That is why we will explore this investment strategy in detail. We will explore what long term rentals are. Moreover, we will mention why this is one of the best real estate investment strategies. Last but not least, we will walk through the two most important steps in making this rental strategy successful. The latter includes the usage of the investment property calculator as well as establishing a good relationship between landlord and tenant. Let’s not waste any time and dig into the topic of long term rentals!
#1 Long Term Rentals
Maybe you have heard of long term rentals before but by the name of traditional rentals. Such rental properties are leased by the landlord to tenants for a period typically longer than six months. Long term rentals alongside with short term rentals are the types of residential real estate investment. Even though there are similarities, traditional rentals and Airbnb rentals are two different real estate investment strategies. Why is it so? Well, long term rental properties are associated with regular tenants and a constant flow of rental income. However, short term rentals (or Airbnb rentals) are leased to different tenants monthly, even weekly. This is because Airbnb rentals mainly attract tourists and businessmen, who are staying for a few days in the city. Long term rentals, on the other hand, provide their tenants with accommodation for a long period of time.
When it comes to learning how to make money in real estate by investing in long term rentals, there are a few variables to consider. First of all, the real estate investor needs to make sure that this is the optimal rental strategy for the chosen property. The simplest way to do this is by ensuring there is a high demand for long term rentals in the area and that tenants are interested in the property type you would offer. Additionally, it is important to establish the appropriate price for monthly rent in order to receive a constant rental income and have your property occupied full-time.
#2 What Are the Benefits of Long Term Rentals?
Every real estate investor wanting to succeed aims for the best real estate investment strategies. Naturally come the questions: “Are long term rentals one of the best real estate investment strategies?” and if so: “What are the benefits of long term rentals?” Long term rental properties truly are one of the best real estate investment strategies. This is due to the fact that long term rentals generate relatively constant income. Additionally, they are considered a low-risk investment. The latter is due to the fact that people, now more than ever, prefer to rent rather than buy a home. Moreover, such properties are associated with somewhat low- effort maintenance. Last but not least, investing in traditional rentals is one of the best real estate investment strategies as it holds the possibility for real estate appreciation. This means that the value of your property is likely to increase over time. This, of course, depends on several different factors. However, if it happens, you can sell the property at a higher price than when you bought it. Meanwhile, you would have received a constant income from that very same property.
Related: Long-Term Rentals: Why You Should Invest in Them
#3 Using the Rental Property Calculator Is a Must
There are several reasons why you need to use a rental property calculator. Let’s start with the time. It will take you tons of time and work to conduct an investment property analysis by hand. This includes analyzing various properties and comparing them as well as researching their locations, all by hand and using spreadsheets. Undoubtedly, this will take you a lot of time not to mention the possibility of making a mistake while doing so many calculations. So the first reason for using the rental property calculator is saving time and providing accurate results.
Also, the rental property calculator is useful for buying a rental property as it is possible to access the data anytime, anywhere. Moreover, Mashvisor’s rental property calculator will provide the real estate investor with additional insightful information. When buying a rental property, it is important to explore the neighborhood as well. Mashvisor’s tool can give you this information. Additionally, it can reveal if investing in long term rentals truly is one of the best real estate investment strategies for the particular area of choice. Mashvisor’s rental property calculator can also give you in-depth analytics for different properties. This way buying a rental property will be much easier and stress-free.
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Related: How Can You Use a Rental Property Calculator to Buy the Best Investment Properties?
#4 How to Establish a Good Relationship Between the Landlord and Tenants
Despite the fact that investing in long term properties is one of the optimal real estate investment strategies, it has its obstacles. Every long term landlord has the fear of having his/her property vacant and the inability to find good tenants. Why so? It is not a secret that many tenants break the rental contract and leave their landlord just because they do not like his/her attitude. Here are few good tips for creating and keeping a good relationship with your tenants.
Related: Becoming a Landlord: 5 Guidelines to Being Fair to Tenants
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Establishing Good Communication
The landlord should make sure that there are no misunderstandings between the two sides. That is why you need to always keep a two-way communication. In order to not only attract potential tenants to your traditional rentals but also keep them for a long time, you need to acknowledge your tenants’ needs and wants and do your best to meet them. On the other hand, your future tenants should know what you are expecting from them while they are staying at your premises.
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Establish the Rules First
The real estate investor should know that establishing the ground rules is essential. Of course, you care about your long term rentals and you want to keep the properties well maintained in order to have a high rental income. You need to proceed with everything the correct way. Communicate to your tenants that you will notify them and establish times for a visit. Make an agreement about which situations you will increase the rent or charge an additional fee. I understand that you would like to get the maximum profit from your investment property but there is no use of increased rent when the place is not occupied. Therefore, by keeping the rules, you make your tenants feel happy as well as less willing to move.
Do you want to know more about real estate investment strategies? Or maybe you are curious how to make money in real estate? Mashvisor has all the answers you need! Just visit Mashvisor’s website and you are one step closer to your goal of becoming a successful real estate investor!