Property remains one of the safest investments when done right, and depending on the market, rental properties can be one of the most versatile financial tools at your disposal.
You can use them as a second source of income, to build a retirement fund, or as a clear-cut investment with long-term returns. If you’re looking to get started in rental properties, what are the roadblocks ahead of you and what can you do about the more common ones?
The money you need to buy the property will be the single biggest barriers between most potential landlords and their plans. Saving up for the home loan down payment might seem like your only option, and you can do it within a year if you’re willing to budget like crazy. But there are ways for those with less working capital to get in on the rental market, too.
In particular, there has been a rise of property crowdfunding platforms that allow different people to put what money they have together. This money pays not only for the property but the management of it by another agency. You can get monthly returns through crowdfunding platforms, but they are naturally going to be smaller than if you were renting out your own property.
Organizing a rental agreement isn’t always the easiest thing to do. Finding the right property, especially if your area isn’t too rental-friendly, finding tenants, and performing all the necessary maintenance can be more of a drain on your time and resources than your busy life has room for. There are rental agencies that can help out, but they’re seeing steep competition from the rise of investment property platforms.
These platforms can help you find properties based on investment potential from all over the country and take care of a great deal of the day-to-day work for you. Check out this Roofstock review if you want a clearer idea of what these platforms are all about. You can keep more of your earnings if you’re willing to fulfil your landlord duties yourself, but you need to think of it as running a business or having a second job in that case, and you would find it much easier if the property was near where you live.
If you’re treating it like a business, then you need to know all about your responsibilities, so you don’t get in trouble. There are handy guides from Landlordology that can help you understand rental laws depending on where you are. If you don’t want to deal with all the little issues that can crop up in a home’s lifetime, then make sure you perform a full inspection of the home before welcoming a new tenant to make it as ready as possible for them.
All investment takes at least some involvement from the investor and with the tools above, renting properties can be some of the most painless investment opportunities out there. If it still sounds like too much work or responsibility, you might not be at a point in your life where it’s the wisest option.