The real estate industry offers investors many ways to turn a profit. From flipping houses and wholesaling to commercial real estate and more, just about anyone can make money in the real estate market. With that said, some avenues of real estate investing are easier and more lucrative than others. For some, rentals are, by far, the best way to invest in real estate with the least amount of effort. Check it out.
You Can Buy Rental Properties for Less Than They are Worth
In many cases, you can purchase rental properties for much less than they are worth. This puts you ahead of the game from the get-go. While some may need repairs before you can begin collecting rent, the effort you put in pays off ten-fold once renters are in place.
You Make Money Every Month (Cash Flow)
Good rental properties (with good tenants!) make money every month above and beyond their expenses. Further, your profits tend to increase as time goes on and you pay down the mortgage. Owning rental properties is a great way to save for retirement as it gives you a monthly income you can count on.
You Get Great Tax Advantages
The government has set up taxes on rental properties to actually make it almost a tax-free venture. Through depreciation and write-offs for taxes, insurance, interest, etc. you can make money with a rental and show it as a loss on your taxes.
Rental Properties Tend to Go Up in Value
Over time, most properties go up in value. This isn’t always the case, but as prices rise due to inflation, so do the prices of homes and other properties. You shouldn’t count on a rise in value to make your money, but it’s a nice bonus when it happens.
It’s Easy to Finance Rental Properties
It’s easy to get financing for rental properties, which makes it easy to purchase more than one property as opportunities arise. This gives you all the above advantages on multiple properties. What’s more, financing a property that increases in value gives you equity you can use via refinancing or a home equity line of credit to purchase more properties or make repairs.
While there are plenty of ways to make money in real estate, rentals give you the most profit with the least amount of effort. Where other avenues require you to keep flipping or selling, a single rental property can continue to generate a profit for its owner for life.