Why Rental Properties Are the Best Real Estate Investments
Rental properties are the best real estate investments
During our time in this business we have flipped dozens of houses and wholesale properties, but we have never seen anything that pays like rentals. You can make a lot of money from other real estate activities, but rentals are also another form of investment that is often ignored because the income is based on small monthly payments. Rental income also pays long after you have bought the property as you enjoy the increase in house value by fixing up the property and residual income on a monthly basis from rental income
Rentals can be bought below market value
Buying a rental property means getting a great deal. A property worth $400,000 could go for $50,000 or $100,000 less. These properties sometimes need work and take time to get them into shape, but they can get you ahead of the crowd. Every property you buy can increase your net worth.
Rentals improve your cash flow by generating money every month
Immediately after you have settled all expenses, including the mortgage, a good rental property will generate money for you every month, and we mean profits. As rents rise with inflation and loans are paid off, profits increase as well. The reason why rentals are an incredible boon for retirement is because you have the opportunity to build strategies that pay you monthly without touching your savings.
Rentals have amazing tax benefits
Given the way the IRS sets tax policies, it is feasible to make money and still show a loss on your taxes. You can make money every month and pay no tax on it through devaluation and deductible expenses.
Rentals go up in value
Though we don't depend on rentals to rise before we make money, it is sweet compensation. Real estate prices rise over time, causing rentals to increase in value. The percentage may be small, but it is something you can leverage.
Rentals are easy to leverage
Whenever you obtain loans by leveraging rentals, the returns increase as you can add more properties to your real estate portfolio. When you leverage, appreciation becomes more profitable.
Loan balances decrease over time
Owning properties not only generates money every month but also helps you pay down loans, which increases returns.
Why should rentals be considered as a wise alternative investment?
Rentals provide a form of passive income that can provide generational income for many years to come. They can provide the ability to diversify your portfolio which contains properties that are flipped for a profit and
In all the other real estate activities we are involved in, we must keep buying and selling houses. But with rentals, a handful of deals can set up a nice form of stable income for years to come.
How can you start investing in rentals?
Though investing in rentals is not easy for everyone because it takes time, money, and consistency, they can get you ahead of the crowd. Investors tend to give up when they encounter some of these obstacles, but to help you grow your own successful real estate portfolio, here are some tips to help you when investing in rentals:
1) Consider house hacking whereby you buy a property to live in and rent out part of it.
2) Purchase a house to live in for a year and then turn it into a rental later on.
3) Refinance a property you already own so that you have money to invest in other properties.
Generating quick money from other real estate activities is good but having a steady monthly income stream year after year is awesome, and that's what rentals can do for you. If you enjoyed our tips, please follow us for the latest news and updates