Although investment options is the term usually associated with the business circles,the truth is that this genie has long since left the bottle and ventured among the laymen. Recent economic crises have taught the older workforce that guaranteed jobs no longer exist, while the Millennial generation has developed a growing obsession with retiring as early as possible. A solution to both these problems lies in using the earned money to establish other ongoing sources of wealth. Here are seven reasons why rental properties should be your number one option.
You can purchase properties using leverage
In other words,even if you’re not able the pay the upfront price of the investment, you can secure the missing funds by borrowing the money from the bank, which is not the case with other popular investing options such as stocks. Of course, this means spending some time using returns to repay the debt, but time is your ally here. Because of the inflation,the price of the properties is constantly on the rise. Even if you are not making new investments, at some point, you will be able to raise the rent.
You are investing in a tangible asset
Investing in a business leaves you with a risk of ending up with nothing if the business fails. Properties are much different. Sure, you may face occasional value drops, but there’s no real way properties can fail because no matter what happens you still own a valuable asset you can later resell. This tangible, real-life value makes rental properties a very forgiving first-time investment for all newcomers that have yet to sharpen their business teeth.
You have direct control over your investment
Another thing that should be interesting to less experienced investors is that, as opposed to stocks and various trusts, properties give you full control over the fate of your investment. Here, finding a hot property is the hardest part of the job,and people who don’t have years of experience in the market should probably ask for the professional property investment advice.But, once the papers are finally signed and keys are passed to new owners,managing the assets is considerably easier.
A place to live is a basic necessity
Ever since the dawn of mankind, people always needed a place to live. And the number of living people is constantly on the rise. These two facts make properties more worthwhile than even the most lingering industries in the history. Tech trends are rising and falling, and even the fossil fuels are slowly going out of business. On the other, the number of people who will need affordable housing until they have enough funds to buy their own properties is only going to grow as the time goes by.
You are using a proven business model
Investing in rental properties is a business practice used by countless generations before us. There’s been more than enough time for us to discover all the possible dangers and learn how to avoid them. Today, the job of an average landlord is pretty simple and straightforward. The rules are already laid, and all the contracts are already written. Because of this strong foundation, new investors have a much easier job making their rental fortunes.
An opportunity for diverse investments
Unlike some other industries where finding an access point is very hard and buying a way in impossible for people with shallow pockets, the rental market is much more accessible and has to offer something for everyone ranging from small landlords to real estate barons. Single-family houses, multi-family properties, high end and low-end apartments, office buildings and office spaces… the list goes on and on, and even the lower tiers of the market are stacked with investment options with potential for great returns.
Freedom to establish other income sources
Finally, rental properties require very little actual maintenance, or any work whatsoever. As a matter of fact, aside from major remodeling that comes every couple of years, landlord’s monthly routine can be performed in a matter of hours, leaving you with more than enough time to commit yourself to a full-time job or another more time-consuming investments.This makes rental properties a perfect option for people looking for an early retirement.
As we can see, buying a rental property is very affordable,forgiving and accessible way for people to make their first investments. More adventures businessmen will probably be turned off by the fact that rental fees produce very stable, but also very slow returns, so this is definitely not the place for the sharks looking for overnight fortunes. But, for all those who seek safety rather than high turnarounds and need more free time to branch out to other fields, the rental market is more than worth checking out.
About the author: Mike Johnston is a home improvement and business blogger from Sydney.He is a regular writer at SmoothDecorator and contributor on several interior design, real estate and eco-friendly blogs. Mike’s goal is to create and share meaningful content that helps and inspires people.