subject: Consider Rentals As An Investment Opportunity [print this page] Investing money in rentals can be a savvy business venture. There are many reasons why investors decide to purchase real estate to use in this manner. For example, there can be substantial financial gain if an individual plays his or her cards right. If an individual purchases investment properties to use as vacation lodging options for travelers, the investor and his or her family members can use the condos or beach houses on occasion, as well. Owning rental properties is like running a business and will take time and energy. It's not for everyone, so the move should be considered carefully.
An investor can gain financially because the people renting the units are paying money to do so. This money can be used to pay the mortgage, if there is one. If the owner has purchased the rentals with cash, he or she will collect a stream of income to invest in other ways. Some retirees pay for all of their living expenses out of weekly or monthly fees collected from tenants. This can be a sound way to finance one's retirement in an era of doubtful future payouts from the Social Security Administration.
If the rentals are located in a desirable area such as on the beach or in a quaint mountain town, the units can be leased to travelers for weeks, months, or seasons, and enjoyed by the owner during off seasons. This is like having a free vacation home for the landlord and his family members. The rent that's paid during prime tourist season can more than offset the cost of the beach house, cabin, or condominium. That's a win-win situation for all concerned.
Before an investor jumps at the chance to be a landlord, it's important that he or she consider the responsibilities of rent collection, maintenance, and repairs. These chores aren't "if's," they're "when's." Rent must be collected and sometimes it will be easier than others to do so. Some tenants are excellent payers while others are not. It may be wise to check a potential tenant's credit scores or to put a hold on his or her credit cards upon check in. Maintenance tasks will need to be performed after every tenant vacates the property. The units will need to be cleaned and serviced by housecleaners and handymen. When appliances wear out or breakage occurs, repair personnel will have to come to the property to fix or replace the broken items. If an owner lives locally, he or she can do much of the work by himself or herself. If the owner lives far away or doesn't want the hassle, a property manager can be hired to take care of the upkeep of the rentals.
In today's economy, owning investment rentals can be a great way to pay for retirement, obtain financial gain, and have free vacation lodging. If a person is willing to accept the responsibilities of collecting rent, maintenance, and repairs, this can be a savvy business decision. Hiring a property manager can be a way to delegate some of the responsibilities and keep the units in great shape.
