There are many benefits (oh, let me count the ways), and a few disadvantages when investing in rental properties. Rental properties have the ability to make your retirement secure, but they are not for everyone. Here's why. . .
Unlike past years where investing in rental properties was simpler, this year could be a game changer with lower interest rates hanging in there. Property values climbed in record percentages, yet rents for tenants remained stable. With all that going on, tenants just might be turning into homeowners.
Either way, it's going to be a win for landlords. You can make money with real estate through rentals, or explore some Owner Financing by helping your tenants become homeowners in the place they love.
Just like most things in life, owning and managing investment real estate has its ups and downs. There are some things, like hiring a property manager and knowing dependable plumbers, etc., that can make your landlordship a dream come true.
One of the most common traits among people who invest in rental properties is that they genuinely like people. Maybe not dealing with people everyday, but they authentically like helping others and derive a great satisfaction from doing so.
Those who are in it just for the passive income that owning rental property promises, soon find that the day-to-day management is more of a chore than a pleasure. And if you can't take care of your tenants, they are going to move out.
But, there are many ways to overcome most of the unfavorable aspects of owning multiple rental units, and good practices to keep your tenants happy and in for the long run.
In my opinion, yes. I have found that when I give up a small amount of the rental income and hire most of the tasks out (repairs, management, accounting, etc.) and not attempt to do it all myself, life is very enjoyable. There is more than plenty to go around, and I have much more time to pursue other pleasures.
As an aside, I took off for 2 months in 2018 for a fabulous trip overseas. If I hadn't had a lineup of reliable assistants I could count on back home, those memories would not have been possible.
Talking to other landlords you'll get a wide range of ideas. Some work, some are lame. That's because not everyone thinks alike, which is good for you.
Quickly put together your own plan for investing in rental properties. It can be as simple as a back of the napkin drawing, and you will be able to visualize an investment strategy that works into both your time and financial picture. You can get fancier later, the point is to see your ideas written down.
The most important thing to consider is your time. Time management can get away from everyone. Once you have a bird's eye view of how investing in rentals will impact your lifestyle, it's time to get down to some real planning strategies.
There's a new buzzword among investors, BRRRR -- even through the rental property strategy isn't anything new. If you think the Buy Rehab Refinance Rent Repeat strategy is for you, learn more about BRRRR here.
Do you have an idea of where you'd like to be with your rental investments a year from now?
Some investors start off with just one property, maybe down the block from where they live, that they can use as a short-term rental, such as an AirBnB. Having a simple strategy and seeing how it goes for the first year or six months is prudent.
Investing in rental properties that are turnkey are a good way to get started. You won't make as much money, and it will cost more since you will be paying pretty close to market value for your rental, but having a tenant in place will save you time.
A turnkey rental property is a rental house (or mobile home) that is in good repair with a tenant already living in it who is paying rent.