Rentals are a Smart Start into Real Estate Investments

People usually think of buying and selling when they think of buying real estate for profit but one of the most lucrative markets to invest in is rental properties. They provide long term residual income rather than a short term windfall. In general there is far less risk involved in buying rental properties.
Management
One of the key elements you will have to decide on if you think about purchasing rental real estate is how you will manage your property. If you just have one multi-unit building you may wish to completely handle the management of the property yourself. If your building is a larger one, and you do not have a great deal of handy-man skills and do not want to be calling contractors to handle every leak, clog, or patch up you can offer one of the units as a free rent for service to a skilled handy man. Keep in mind complicated repairs will still probably require hiring a contractor, but you can have some assurance that immediate needs can be met quickly and still handle the rest of the management yourself.
If you are considering owning more than one property hiring a property manager begins to make more sense and also frees up your time for other ventures.
Cash Realities
The cash flow of a rental property is more than just the value of its available units vs. its cost. Make sure there is enough income from the property to cover the expenses of utilities, taxes, legal fees you will encounter during the transaction and while you own the building as well as insurance.
Leverage
Owning rental properties accumulates equity that can give you valuable leverage when looking for loans for other real estate investments. That makes your rental property even more valuable than the actual income it represents. Owning rental property is one of the most secure methods of starting a portfolio and gives you a solid ‘hands on’ asset that very few other forms of investment can provide.

Leave a Reply

Your email address will not be published. Required fields are marked *