5 Reasons to Start Investing in Rental Property This Year
Have you always considered investing in a rental property, but you’re unsure where to start? Maybe you’ve never truly weighed the advantages of owning a rental property.
There are more than 48 million rental units in the United States. You could be building your investments and making money right now.
If you’re still not convinced, read these five benefits of investing in rental property, and you’ll change your mind.
1. Diversify Your Investments
If you’re looking for ways to diversify your portfolio, investing in a rental property is a great way to do so.
Maybe you’re already invested in the stock market, but that’s it. The more diverse your investments, the less likely you’ll suffer a significant financial blow if something happens, such as a stock market crash.
2. Obtain a Cash Flow
One of the biggest benefits of investing in rental property is that you obtain a cash flow every month as your tenants pay rent. Cash flow refers to the difference between the rent collected and your expenses. You can use that extra money however you want.
Most investments don’t offer this benefit, as you usually have to sell an asset to receive your money.
3. It’s a Safe Investment
Investing in a rental property is generally a safe investment. It isn’t often that your property will depreciate, as long as you care for it. If it does decrease in value, it may only be for a short time.
Other assets might decrease in value over time or fluctuate, causing investors to lose money or at least cause them stress. You can even increase the value of your property by upgrading it, which is one of the unique advantages of owning a rental property.
4. Real Estate Is a Tangible Asset
One problem with investing in intangible assets, like stocks or bonds, is that you don’t own anything physical. If the stock market crashes, your stocks could become worthless.
However, rental properties are tangible assets. You have the power to sell the property if you need to and when you need to. You might have to go through the paperwork, but it’s worth it.
5. Values Usually Appreciate
The value of your home will likely appreciate over time. Major events, such as the housing crisis, are rare.
Most investors see their properties increase in value, especially if they put the time and effort into maintaining and upgrading them. People that buy “fixer-uppers” and sell them are known as house flippers, and they sell their investments for profit.
To ensure your property will appreciate, it’s best to use a property management bookkeeping system. That way, you’ll always stay on top of your rental property.
Start Investing in Rental Property
If you’re interested in discovering all these benefits, start investing in rental property. Anyone can start, and it’s an excellent way to diversify your portfolio.
To learn about real estate, investments, business, and more property investing tips, check out some of our other posts. We have the content you need to make smart financial decisions.
