There are many forms of Investing when It comes to Real Estate. These forms range from buying real estate related stocks and investing in trusts and real estate crowdfunding platforms, to purchasing individual properties directly either to resell or rent out.
Although there are a lot of ways to invest in real estate, to put it simply: we can put these investment approached into two main categories: investing in a property to potentially resell it quickly for a profit, and investing in a property for the long-term and renting it out.
There are a majority of investors who choose to invest in properties long term, and more often than not, these investors always gear toward Rental Property Investments.
One major potential benefit of investing in a rental property is that it has the possibility to provide two types of return. First: Appreciation. In the long run, the property value increases. Second: The owner can gain through return in the form of cash flow. This is earned by renting out the property to tenants for monthly payments that exceed the owner’s overall monthly expenses to maintain the property.
Below are a few Benefits and Drawbacks when Investing in Rental Properties:
Benefits:
Lucrative Source of Income: As mentioned above, rentals generate 2 sources of income: monthly rent and Appreciation (property value growth).
Inflation Protection: Assets like single-family homes tend to appreciate and so, real estate can serve as a hedge against inflation.
Income Predictability: Expenses and returns are predictable with Rental properties. When you determine your rental rate, budgeting becomes an easy task.
Asset Buildup: You may only end up putting 10-15% of a mortgage by purchasing a residential property and renting it out.
Drawbacks:
Regular Upkeep: Regular maintenance can be very difficult for owners who are preoccupied with a full-time job.
Difficult Tenants: Difficult tenants can be a source of headaches. If not screened properly, they can potentially destroy property or fall behind on rent.
Active Involvement: Owning a property often involves talking to tenants regularly, filing necessary documents and repairing the property when needed.
Vacancies: High vacancy rates can affect rental income, and if not managed properly, properties may remain vacant for at least a portion of the year.
How can Vikas Realty Group help get started in Investing?
If you’re interested in investing in real estate and would like to learn more about investing in rental properties but the Drawbacks are giving you second thoughts: When the thought of searching for the perfect rental property, the worries that come with Vacancies, and dealing with tenant’s leaky faucets and dirty carpets sound like a challenging task for you, a very good alternative is to contact Vikas Realty Group, send us a message at support@vikasrealtygroup.com or contact us at (408) 373-5484 | (425) 818-5288. We can help give you a smooth and breezy Rental Property Investment experience.
Vikas Realty Group 