Rental Property Benefits
One of the greatest advantages to owning investment real estate is the potential for passive income that does not need to be earned. This is one of the many reasons that investors are attracted to rental properties.
However, the benefits of rental properties go much further than just the rental income. This article will focus on the other benefits associated with rental properties and a few rules that will help you get the most from having rental properties in your investment portfolio.
Rental properties can be a great investment vehicle for the following reasons:
As you can see, there are a lot of good reasons to own rental property. Many people invest so that their money will grow, so it will provide income, or to take advantage of tax break opportunities. With rental properties, you get the best of all worlds because you can do all three (growth, income, and tax shelter) with the same investment. This is one example of why real estate is unmatched in its ability to provide wealth for investors.
In order to get the most out of a rental property, there are a few rules that you need to follow. You have probably heard a nightmare story about how a landlord was abused by their tenant, or something happened to the property. While this can happen, there are ways to minimize the possibility of problems happening. The whole point of setting these rules is so that you do not fall into traps.Rental Rules
If you do not stick by rules as a landlord, tenants will run all over you. In order to be successful with rental properties, you must not only manage the tenants, but the property as well. We recommend a few rules to live by as a landlord:
When it comes to owning rental properties, you really have to break everything down into a couple of categories. The first one is finding the right tenant. As you are screening potential tenants, the main thing that you will want to ensure is that they check out. Many of the horror stories you hear from landlords that were burned are because they did not do their homework on the tenant. They didn’t verify that they had the ability to pay the rent. They didn’t do a background check or credit check. They didn’t call the references. So, the lesson is that by following the proper steps, you will eliminate many potential issues from the start.
The next step is to fill out the proper agreements. Another huge mistake landlords make is that they do not have a lease agreement signed by the tenant. This greatly reduces their ability to quickly evict a tenant if the need arises. The agreement is protection for you and you are asking for problems if you do not get one signed.
You will also want to properly manage the property. We highly recommend that you find a competent, highly skilled property management company for this. If you spend all your time collecting rent, doing repairs, and everything else, then you are not going to have time to find the next deal. The point is that you want to own your rental properties instead of them owning you.
We also highly suggest that you have a pool of money that you set aside for repairs and upkeep on the property. That way if something needs to be replaced, it will not hurt you financially.
Rental properties are a great way of making passive income. These principles and rules will help you make the most of rental properties so they are an asset to your investment portfolio instead of a liability.