What are the Advantages of Owning a Rental Property?
If you’re looking for ways to generate passive income or regular cash flow, investing in real estate is a great option. Real estate investments are more advantageous than other investments in various ways, and there are few downsides. Here’s what you need to know about investing in real estate.
1. Real Estate Investments are More Stable and Secure than Stock Market Investments
Real estate investments are one of the most popular types of investments due to their ability to provide the investor with more control and more security. While the stock market can fluctuate greatly over short periods of time and drastically over a matter of weeks or months, real estate investment properties offer a secure, stable form of income that doesn’t require checking stock market stats daily to know what’s going on and what to expect next.
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While investing in the stock market requires significant knowledge of various industries, businesses, and rules and regulations, investing in turnkey real estate properties only requires research and due diligence. If you prefer not to plan on spending a significant amount of time each day monitoring your investment, investing in rental properties is the best choice.
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2. Turnkey Real Estate Investment Properties Offer Immediate Access to Cash Flow
Unlike stock market investments, real estate investment properties allow you to access cash flow within a matter of weeks and each month afterwards, while stock market investments are only accessible if you sell your stock without investing in another. Stock market investments can make a nice addition to your real estate investment portfolio if you’re seeking additional ways to gain long-term returns on initial investments, but for those who prefer to see immediate results, investing in turnkey real estate properties that don’t require remodeling or renovations is your best option.
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3. Real Estate Investment Companies Can Help Monitor Your Investment
Many real estate investors choose to invest in communities that are hundreds or even thousands of miles away from their homes. For real investors in California, New York, and other areas with a high cost of living, investing in Southeastern cities like Memphis offers a large pool of affordable turnkey rental properties and passive income without a substantial amount of money required on the front end.
If you decide to invest in an area you are not familiar with, working with a real estate investment company can help you make the most of your investment. Real estate investment companies with experts who are familiar with the local real estate market allows you to have an understanding of which properties will receive the largest return on investment, and they can help you make an informed decision about which communities you should consider investing in.
In addition, real estate investment companies can serve as a landlord, collecting rent, taking care of maintenance requests, handling rental agreements, and more. They can help you craft legal documents to ensure you and your renters are protected and taken care of, and they can help find reliable renters to ensure your cash flow remains stable.
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What are the Disadvantages of Owning a Rental Property?
We’ve covered the advantages of investing in real estate over other financial investment opportunities, but what are the downsides to being a real estate investor. There aren’t many, but there are some things to consider and to keep in mind before you being the process of buying homes for rental purposes.
1. Dealing with Renters
There’s no getting around it. As a real estate investor, you’ll have to deal with renters. After all, they are the source of your income. There are plenty of great renters who pay on time, maintain their space, and don’t cause problems, but there are also renters who do not keep up their end of the rental agreement. That’s why it’s important to choose the right renters on the front end. Checking credit scores, background reports, and criminal records are all within your right as a rental property owner.
Choosing renters with good credit scores and a relatively lengthy credit history is always a good idea. You may even consider preventing renters from bringing pets into the home or smoking during their lease, which can be outlined in the rental agreement, in order to prevent damages and repairs that may need to be made. You’ll also want to secure a security deposit on the front end in case any repairs do need to be made.
READ MORE: 4 Ways to Make the Rental Process Successful for You and Your Tenants
2. Rental Agreements and Legal Matters
As a rental property owner, it’s absolutely essential that you follow all housing guidelines governing your local, state, and national areas. Do your due diligence and research housing laws and best practices in order to know what you can expect. When preparing rental agreements and other legal documents, it is worth hiring a professional to help you. Real estate management companies can lend their expertise and provide you with examples of real estate documents that protect both the renter and the rental property owner. Some things you’ll want to consider when creating a rental agreement:
Will renters be allowed to smoke in the rental property?
Will pets be allowed?
On what day is rent due?
What forms of payment are accepted?
On what day is rent considered past due?
Is there a late fee? If so, what is the late fee, and does it increase over time?
What violates the rental agreement? For example, smoking in the home? Not paying rent for more than two months?
3. Finding a Landlord
Another detail you’ll want to consider before becoming a rental property investor is whether or not you’ll serve as a landlord as well as a rental property owner or whether or you’d prefer to hire a landlord or real estate investment company to manage your rental properties. If you have time to devote to handling maintenance requests, disputes, and other issues, you can take on this role as well, but if you’re an investor located in a different area than your rental properties, or if your schedule does not allow, consider hiring a real estate investment company.
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Real estate investment companies can help you manage your investments in a variety of ways. On the front end, they’ll help you locate turnkey rental properties in your budget and desired neighborhoods. If they work closely with real estate attorneys, they can also make the process of buying an investment property fast and efficient. Once you’ve purchased a rental property, a real estate investment company can help take on some of the day to day duties of a landlord, including
Where to Find Turnkey Real Estate Investment Properties
Are you ready to find your first, or your next, turnkey real estate investment property? Contact a real estate management company today to get started. They can help you find the right investment property for you and help facilitate the buying process from start to finish. They can even answer any questions you have once you’ve secured renters for your new investment property. Learn more about real estate investment companies or view turnkey real estate investment properties for sale today.
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