It’s no secret that we love rental properties.
Sure, flipping and wholesaling can be fun — but if you really want to make some money and enjoy the fruits of your labor, investing in rental properties is the way to go.
Need some convincing?
Here are 6 reasons why rental properties are the best investment you can make.
- Unlike stocks, you don’t need a lot of cash on hand to buy.
Rental properties are ideal because you can borrow from a lender to increase the potential return. This is also called leverage.
In other words, you don’t need to have all of the property’s purchase price on hand to be able to buy it. You can buy properties for far less cash than you might need to purchase stocks or other types of investments.
- People always need a place to live.
The real estate market may bounce up and down, but the demand for rental properties will always remain the same. People always need a place to live — which means real estate is an investment that will last.
- It works for millions of other people.
If you’re worried about pulling the trigger and buying a rental property, consider the proof of concept handed down by millions of successful investors before you.
According to a joint survey produced by BiggerPockets and Memphis Invest in 2012, “one out of eight, or 28.1 million Americans, either consider themselves to be residential real estate investors or own residential investment properties today.”
- It offers variety.
Rental properties also offer an incredible amount of variety.
You can invest in single-family houses, small multifamily properties, large multifamily apartments, office buildings, high end, low end, Section 8, transient, and any of a number of other options.
The possibilities are endless.
- There are multiple ways to make money.
One of the greatest benefits of rental property investing, especially compared with other real estate niches and strategies, is the opportunity to capitalize on all four of real estate’s major profit sources:
- Cash flow
- The loan pay down
- The tax benefits
- You’ll make money 24-hours a day, 7-days a week
We love the idea that you can make money without physically needing to be present. While owning rental property is not a 100% passive activity, there are systems in place to allow you to outsource most of the landlording process to a property management company, like SMART.