Regardless of how long you’ve been investing in Summerville rental properties, the key to long-term success can be found in making a profit out of your investments. According to recent data, individual real estate investors own almost 75% of all rental properties in the U.S. And, with home values on the rise in markets nationwide (more than 19% since 2020!), buying real estate is both a popular and a potentially profitable way to build wealth.
Just because you invest in rental properties doesn’t mean you’re automatically going to get rich. You have to consider all that these investments come with — risk, reward, etc. However, using the knowledge and experience of veteran businessmen, you can learn to make money in rental real estate quickly.
Quick but Risky
Even though many of the more profitable approaches to real estate investing require a length of time, there are some ways you can earn a quick buck in real estate. One way would be house flipping. It does come, however, with some pros and cons. House flipping, for instance, gives you extra profit each year.
The process of locating, buying, renovating, and then re-selling just one property can go over a long period of time. In that time, a lot can happen. For example, unforeseen repairs. Or, even a sudden downturn in the market. To create a steady income stream, you will need to be updated with local investment properties, as well as have a few renovation projects on the side. This will most likely generate stress and take away most of your time.
Profitable (Maybe) and Volatile
Another viable method to make fast money by investing in real estate is to buy property as a vacation or short-term rental. Some investors like the idea of charging far more than long-term rental rates for a property, especially if it is near popular vacation areas or destination spots. Owning these rentals, though, means that the owners are at the mercy of a volatile market. Something like events being canceled to a decline in tourism could make your property not as profitable as before.
For those rentals that are short-term or vacation, you will need a good number of tenants in order to stabilize your income flow. Tenant screening will be such a long process, though! Another issue you’d want to look into is that of wear and tear — especially because of the frequency of going in and out of tenants from the property. More in and out means more maintenance and repairs — another set of expenses. This could lead to loss, especially if the competition is high and the hotels are cheaper. This will make renting your property more difficult.
Profitable and Stable
On the contrary, the buy-and-hold approach to real estate can be just as profitable as these riskier methods, but minus more of the stress. For a long time now, many investors have chosen to invest in long-term rentals — for good reason! Long-term rentals, like a single-family rental home, for example, don’t need as much attention on a daily basis. Tenants in these rentals are most likely to stay long-term. Given the increase in the number of renters these past few years, it’s most likely going to stay that way for some time. What does this imply? Well, you won’t have to work hard for the marketing and tenant screening all too much!
What is more, tenants in long-term rentals tend to take better care of the property and can be relied on to help with regular maintenance tasks. Not so of vacation or short-term rentals. With long-term rental properties, rental income is far more regular and steady, and over time, property appreciation can make owning long-term rentals one of the best ways to build real wealth.
Interested to grow your income by investing in rental real estate? We can make that happen for you. Our Summerville property managers work with investors like you to help find, assess, and manage quality single-family rental properties. Contact us online to learn more!
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