While there is risk involved with every type of investment, buying a rental property often offers the most promise of a return on your investment. This is especially true today as the number of homeowners continues to decline. Year by year, fewer people are buying homes of their own, which means they will need rental homes. By investing in real estate, you can cash in on this growing need.
A Consistent Source of Income
Earning passive income is probably the biggest attraction to investing in rental property. It involves evaluating your expenses, such as your monthly mortgage payments, insurance, property taxes, and routine repairs. Once you have an estimate of expenses, compare that to your expected monthly income from the property to determine if it will be a profitable venture for you.
Protecting a Vacant Property
It’s not uncommon to inherit a home from a relative or buy a vacation home that you rarely use. Leaving these properties empty can open them up to vandalism and squatters. By renting these properties out to worthwhile tenants, you can ensure the properties are well cared for in addition to earning income from them. If the property holds sentimental value for you, this can help you ensure the property remains secure.
Become Your Own Boss
Buying investment property can also help you get out of your nine to five rut. As you begin earning income, you may find that you no longer need to work for someone else. You’ll be your own boss and the time you do spend working on your rental properties will be invested in your own profits.
Maintain Personal Financial Security
There’s no telling what the future may bring. You may lose your job, suffer a devastating illness, or face a lawsuit. Any major life event can leave you in a financial hardship, but, if you own investment property, you’ll have the resources to help you bounce back. You can use any equity you have in the home to help you get out of debt, or you may be able to take up residence in the property on a temporary basis.
Owning rental properties can help you now and in the long run by providing you with a source of passive income. This will be especially beneficial as you pay off the mortgage on that home, allowing you to keep more of the income you earn from the property. For many people, this can be the key to financial freedom.