Many people, real estate investors included, ask themselves the question: “Should you buy or rent a home?” There are people, who prefer to invest in a property and live in it without thinking of making money in real estate. Others are buying investment property and waiting for real estate appreciation before putting the home for sale and moving into the next one. Some are buying an investment property to rent it out on the market and receive rental income from it. All in all, there are various types of arrangments for your accommodations.
There are also many types of investment strategies to choose from if you want to be making money in real estate. However, the question still stands. Should you buy or rent a home? The answer to this question may be very helpful to beginner real estate investors. Especially beginner real estate investors, who are exploring ways of buying an investment property with no money down. Are you interested in real estate investing for beginners? Or do you simply want to know should you buy or rent a home? Keep on reading to find the answers.
Related: Top Six Real Estate Investment Strategies
#1 What You Need to Know Before Buying Rental Property
Before providing the answer to “Should you buy or rent a home?”, we need to explore another query. This is namely: “What you need to know before buying rental property?”. Buying investment property, in general, is not a simple task. Buying an investment property to rent it on the real estate market, however, is even harder. In order to receive a constant positive cash flow of rental income, you need to take several variables into consideration. For instance, you need to pay attention to the area. This includes conducting real estate market analysis to get in-depth information. When it comes to real estate investing for beginners, you need to be careful and patient. Buying an investment property to rent is a long and difficult process if you want to be successful. You need to consider the market- demand, and supply for rentals in the neighborhood.
Moreover, you need to choose between the two possible rental investment strategies. This means deciding on becoming a traditional rental landlord or an Airbnb host. Luckily for you, Mashvisor’s investment property calculator can show you the optimal rental strategy for the specific property of your choice. Additionally, the tool can calculate various real estate metrics in no time and ease the process of finding the properties, which generate high rental income. As this is just a brief glimpse of what you need to know before buying rental property, do not forget to go ahead and use Mashvisor’s investment property calculator in order to receive all the information you need. It is time to move on to find out should you buy or rent a home.
#2 Real Estate Investing for Beginners- Real Estate Appreciation
As previously mentioned, there are various investment strategies, and buy and hold is just one of them. This strategy, in principle, consists of buying a property and waiting until its value increases over time in order to sell it. This property value increasing is called real estate appreciation. Now, real estate appreciation can happen for various reasons. For instance, it can happen due to changes in the real estate market such as an increase in the demand, lack in the supply, etc. Additionally, increase in the value of your property may appear as a result of developmental plans in the area, economic changes and so on and so forth. Buy and hold is a great investment strategy, which many beginner real estate investors opt for. This is due to the fact that the real estate investor can make money while using this strategy. Buying investment property, renting it out in order to receive rental income and selling it once its value has risen is a sure way of making money in real estate. But how would you be buying an investment property with no money down? Moreover, how does that give any answer to the question: “Should you buy or rent a home?” Well, let’s go ahead and you will answer for yourself should you buy or rent a home.
Related: 6 Things to Know About Real Estate Appreciation
#3 Should You Buy or Rent a Home? What About Buying an Investment Property With No Money Down?
Should you buy or rent a home? Well, if you are a real estate investor, especially a beginner in the field you might consider buying an investment property and living in a rental. No, this is not a foolish thing to do. In fact, it is a great investment plan for many beginner real estate investors, who have no money down and cannot afford paying a mortgage. Imagine that you buy a rental property- a single family home- for $200,000. When buying your property, you took a mortgage loan. Let’s say you need to pay back $1,000 each month. You place the property as a traditional rental and charge your tenants $2,000 monthly. At the same time you rent a small apartment for which you pay $500 a month for rent. Do the calculations yourself. By renting the property, you are both able to pay your mortgage, your own rent and have some spare money. It is important to note that this might not always be the case, but it is definitely possible. You can buy a property, which pays for itself through rental income, and sell it when its market value has increased. That is how you can be making money in real estate. So, what do you think? Should you buy or rent a home?
Related: 10 Different Ways to Purchase a Property With No Money Down
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