More than 10 million people in this country own rental properties, and people do this to earn extra money.
But is this something you should do? Should you invest in an investment property for additional income?
Investing in rental properties is common among people of all ages and industries, but it's not for everyone.
Here is a guide to help you consider the essential factors before deciding if you should invest in rental properties.
Benefits of Owning an Investment Property
First, you might consider why people purchase investment properties. The primary answer is to make money. Therefore, making money is the first benefit of owning an investment property.
You make money by charging rent. However, you must also pay the expenses, including the mortgage, if you have one.
Secondly, real estate is an asset that increases in value. Therefore, when purchasing rental properties, you must use specific standards to ensure you pick the right ones.
For example, buying real estate in good areas is vital. If you buy properties in good areas and keep up with the repairs and maintenance, your property values will likely increase over time.
Increased property values means you can sell them later for a larger profit. It's also helpful to buy properties at the right time, and you can study the market conditions to determine when to buy.
Purchasing rental homes requires money. You need money to buy the properties. If you don't have money, you can turn to funding options.
Therefore, considering your funding options is another factor to consider before investing in properties. Funding a rental property is necessary for many investors, but what are the options?
Some people use their home's equity to fund a rental property. However, others turn to hard money loans, conventional loans, or other loan types.
You can probably see all the perks of owning a rental home, but have you considered the duties? As a rental property owner, you're responsible for managing the properties.
The first part of managing them is choosing tenants. Do you know how to run tenant screenings? Do you know what qualities to look for when selecting your tenants?
In addition, you must handle evictions, rent collection problems, and other tenant-related issues.
Secondly, you'll be on call all the time. For example, your tenant might have an emergency problem with their rental property. When they do, they'll call you for help.
You have the responsibility of addressing the issue promptly.
Additionally, rental property owners must handle the maintenance for the properties. They must also handle preparing every unit for new tenants when one moves out. Can you handle these duties?
Talk to a Property Management Company
You can earn money by purchasing an investment property, but it might also require time and duties.
However, you can hire a property management company if you want to reap the benefits of owning rental properties without having the work. Would you like to learn more?
Contact us at Roundtable Property Management in Jacksonville, FL. We offer property management services and can answer all your questions.