In recent times, rental properties have soared, currently being the highest they have been in the past two decades. With all these numbers floating around lately, if you are wondering whether rental properties are worth investing in, then you have come to the right place.
As with all things, rental properties have both negative and positive points. Depending on you, the benefits to drawback ratio may vary. We will be looking at both of these perspectives in today’s article.
Earn through rent
One of the key reasons to invest in rental properties comes due to the potential they have for generating money. Nevertheless, it is important to note that it may not always be the case. Many key factors are involved including the location and availability of utilities which can affect how successful you can be to earn from your property.
Increase in Value
Experts believe that the real-estate business if done right can be extremely profitable. Looking at the data from previous years, there is a strong possibility to see an appreciation in the value of properties. If you collaborate together with a NYC property management company, your chances of success will increase.
Being an owner of a rental property comes with its perks, such as a decrease in leasing fees, maintenance costs, property taxes to speak of a few. However, taxes are a double-edged sword. With time, taxes tend to increase and so do the expenses. Unless your income increases along with them, that can slowly become an issue. A solution is to opt for rental properties in states where the taxes are less.
Cushioning the Inflation Weight
According to riothousewives.com, around 60% of people in the United States feel anxious and unsafe. Added to this is the uncertainty of losing the value of assets because of the rising inflation. This is where rental properties can make a significant point as they can act as a cushion against this inflation. This is because they tend to see a positive change in value along with the economy of the country, hence providing financial security.
Although there are a lot of benefits in investing in a rental property, it is easier said than done. More often than not, a large sum of a down payment is required which can be daunting for a lot. Nevertheless, there is a way around this by getting loans but due to the uncertainty of whether the property would generate funds, it can be potentially risky at the end of the day.
Not a walk in the park
As many may be confused, although real estate has a lot of potential, it is far from being a “get rich quick scheme.” When getting involved with properties, one needs a lot of knowledge, experience, and patience.
Real Estate isn’t known for having high liquidity. It can take a while to sell rental properties so if you aren’t positive that you have money to spare, investing in rental properties can be a dangerous gamble.
Buying the property is one thing but dealing with tenants is another. Tenants are not always friendly and dealing with them can be a hassle at times. There may be a delay in the payment of rent and if you have to make ends meet, it can get difficult. Even if you hire a property manager, that alone doesn’t assure that you would end up with good tenants.