When it comes to investing, the first thing that comes to the mind of most people is stocks. For decades, people have invested in stocks and made (and lost) a significant amount of money. Though any type of investment comes with risks, there are other ways to invest your money than just stocks. The real estate industry is another popular sector to which investors tend to entrust their money: and with a real-estate boom on the rise as the COVID, pandemic begins to wane, with good reason.
Here are three reasons why you should consider investing in real estate, specifically rental properties.
Rental properties are either residential (homes) or commercial (businesses) properties that are leased or rented over a certain period of time. Another popular type of rental property is a vacation rental, in which tenants rent for a shorter period of time than they would for residential property (typically less than six months). Whichever type of rental property you choose to invest in, doing your research and ensuring that you take the proper steps to make your property a success will greatly increase your chances of gaining a secondary income from your investment. This secondary income can allow you to purchase more rental properties, all while diversifying your investment portfolio and building your wealth.
The proper steps to take to ensure that your rental property will be successful depends on the type of property you choose to invest in. However, for any type of property, where it’s located is probably the most important factor determining whether or not your property will turn a profit. No matter what type of rental property you invest in, you’ll want to make sure that it’s located in a fairly accessible place that is seeing or is projected to see economic growth. People tend to want to rent places that have access to a variety of things, whether it’s recreation, entertainment, and good schools (for families) or high traffic areas (for businesses).
Becoming the owner of rental property means that you’re the landlord— whether it’s a residential property or a commercial— and all of the responsibilities of a landlord fall on your shoulders. This can be particularly challenging, especially if you have a full-time job or if your property isn’t located in the same city as your primary residence. Fortunately, you can hire a property manager to do all of the grunt work for you. This will give you more time to focus on other matters, whether it’s your primary job, family, or other endeavors. Just make sure you hire a property manager that you trust because their work is still a reflection of you.
If you choose to remain the property manager, just keep in mind that it’s important to be responsive to your tenants, whether they’re a family renting a residential home or business professionals renting an office space on commercial property. Proper communication skills are one of the keys to being a successful landlord, and you’ll want to gain a reputation for being a good landlord if you want to invest in more rental properties.
Even though the real estate market is currently seeing lower prices on all types of properties, it can still be pretty expensive to get started investing in rental properties. Fortunately, there are companies that offer rental property loans to help first-time and seasoned investors get started with and expand their real estate portfolios. Keep in mind that some lenders may require more information than others, so do your research when looking to partner with the right lending company. Every investor’s goals are different, so choose a lender that will help you reach yours.
Like with any investment, it’ll take some time to see a profit. Just be patient and trust that your research and hard work will pay off, allowing you to become a successful real estate investor.
I am Tristan who loves to ride and spend time with my jenny (horse) and my love Mark. After completing my graduation, I have been working as an accountant in a private firm in Cologne.