The real estate investing business is very lucrative. However, looking for the best investment strategy might be challenging. Therefore, we are going to present to you the idea of investment rentals, and why it is the best way for you to make money in real estate.
Every matter has a reason to it. Sure enough, there is a reason that makes investment rentals the best real estate investment strategy for you to make money. So, keep reading to learn why is it so.
First of all, what are investment rentals?
Investment rentals are investment properties that you purchase for the sole reason of renting them out. It does not matter whether you rent them out for short terms or long terms. They are purchased for making money by renting them out.
Of course, there are many different rental strategies that you could go with. Whether you use it for Airbnb rentals or traditional long-term rentals, what matters is that you make money through renting out your investment property.
Without any further introductions, let us dig into the reasons why investment rentals are the best investment strategy to make money in real estate.
Investment rentals provide you with a steady income
What would be better than being able to have a steady income that is coming to you at the beginning of each month? When working with investment rentals you are able to predict your rental income. When you rent out your investment property, you sign a lease agreement with your tenants for a specific period of time. Therefore, you are going to have a steady rental income for the whole term of the agreement. Moreover, in this way you know for sure how much money you are going to earn every month and for how long, which makes it easier for you to sit back and enjoy the process of making money without having to worry about your rental income.
Investment rentals help you pay off your mortgage
Investment rentals provide you with the option of financing your investment property with a mortgage and let the rent take care of it. In other words, some real estate investors prefer to take a loan and buy an investment property, rent it out, and let the rent cover for the loan payments. You buy your investment property with a loan that is assigned to your name, while your tenants are paying for it.
Indeed, this is one of the best real estate investment strategies that you can go with. After all, you will not have to worry about paying off the loan with your own money. And at the end of the day, when your loan is fully paid, you will own a real estate property that you did not pay for.
Investment rentals are associated with lower risk
With investment rentals, you have a lower risk of vacancies. There are always people looking for housing in the real estate market. Even if the real estate market collapses, there will always be people looking for a house to live in. Keep in mind that statistics have proved that renters are increasing rapidly everywhere in the United States, which makes investment rentals a safer option for you to invest in.
Investment rentals benefit you through appreciation
With investment rentals, you get to rent out your property while it is appreciating. This means that you can get more financial benefits from it as time passes. The more you hold on to your investment property, the more money you make from renting it out and from its annual appreciation as well. Therefore, whenever you decide to sell your investment property, you will have made more money while holding to it and after selling it.
Investment rentals provide you with tax deduction benefits
As a real estate investor in investment rentals, you get tax deduction benefits on your properties as well as deductions for any extra expenses you make on it. This makes it reasonable to go ahead and find rental investment property to start your real estate investing business.
There are also tax deduction on any losses you acquire on the investment property, so that is an option for you as well.
When we say that working with investment rentals is flexible, we mean it in terms of working hours. You can invest in rentals part time, while having a full-time job. Of course, it depends on the number of rental properties you own. An average landlord can handle up to five rental properties, while having a full-time job outside of real estate. But, you still have another option if you wish to expand your investment business beyond that number. You can always hire a professional property management company that will take care of your rental properties. They will take care of maintenance, collecting monthly rent, and dealing with rental arrears in case they appear.
However, this does not mean that if you want to invest in more rental properties you will have to hire a property management company. If you feel like you have the time to manage them yourself, then go ahead. Just make sure you are capable of doing it. Otherwise, it will be hard to balance between your real estate investments and the other career you have.
There are many reasons why investment rentals are the best investment strategy for you as a real estate investor. This real estate investment strategy is especially beneficial if you are just starting investing in real estate. All you have to do is think things through and consider the pros and cons of this kind of investment. Moreover, why not use Mashvisor as a guide for you along your investment journey. Mashvisor will provide you with all the data and tips for real estate investing. You will have access to all the up-to-date data and market analysis that will serve you to find rental investment property with the maximum potential to make money for you.