There are a variety of ways that people look to gain income besides their primary job. A secondary job, purchasing a lottery ticket, or investing in stock are common strategies.
Another idea to boost your income is to invest in a second property. By having a building to rent to interested people, a rental property is a fantastic idea to consider. Of course, like every other investment, renting a property for investment has its negatives and positives.
The risk we take when investing in rental properties
In order to acquire another piece of property, money is the first step. Since this comes out of the person’s pocket, people may hesitate prior to being willing to indulge in purchasing another building – primarily since there is no set guarantee that money will be reaped from this investment.
There’s a high chance that people will not want to risk the money if there’s no certainty that there will be no renters. However, with the economy recovering again, there are more and more houses being sold and people willing to rent.
Another possible con to consider is what the condition of the house is. If the property is going to require a high amount of financial aid in order to fix the place back up into standard living conditions, then the investment more than likely is not worth it. If anything investment is going to lead to either an ultimate decrease in money or to breaking even, then it isn’t going to be remotely worth it in the first place.
Finding a place to purchase that needs the least amount of work to improve the quality of life is the best shot you have, although spending some extra time and cash in order to decorate the place might be able to boost the monthly rent – and, therefore, income – that you will be receiving.
If the place you decide to invest in does need work, however, then there are other options beyond hiring other people to tidy and furnish up the place. If you are able to work on the place yourself with your own resources, you will probably be able to save a large amount of money in exchange for time spent on improving the living space.
Something else worth thinking about before buying a new property is advertising to rent the place once it’s completed. Depending on what sort of landlord you are, you will probably be more firm about background checks and want to be able to ensure that the people who will be staying in the place will have the ability to pay the monthly fee.
There’s also other important decisions to make, such as if pets are permitted or not, and if the place should be a smoking free zone. If there are problems such as a leak or flooding in the building you are renting, be prepared to have to go deal with the issue unexpectedly.
What type of rewards will I reap from a rental property?
Once the place is ready to rent, some advertising needs to be done. Whether it’s done via online, the newspaper, or fliers, the place needs to be posted in a public place that many people will see.
As people begin to contact you for more information and demonstrate interest in moving in, you will have an incoming monthly payment. Payments can vary from a range of $400 to well over $1500 depending on the location of the property.
Additionally, if you decide you want to sell the property eventually rather than keeping it in your possession, it may be well worth the wait. In the future, the place will have the capability of being sold a higher price in the market if it is not doing well currently.
Renting the property also includes the cost of the mortgage, insurance, taxes, and other potential financial burdens that come along with owning a building. There are plenty of benefits to be reaped from choosing to do this, such as landlords being given tax advantages as well as the reduction of the mortgage payment that comes around each month.
Let this be a financial guide for your new rental property
To summarize it all up
There are a large variety of factors that are necessary to consider before making the decision of purchasing a second building in hopes of having another method of income.
There are many pros and cons to be thought over.Ultimately, having a rental property for investment is a rather big choice to make, and there is a lot of work required to go into it before it can be rented out to anyone.
Make sure you are aware of the potential costs prior to making this investment – but if it works out well for you, then congratulations on your new source of income.