Landlords often have a bad reputation. We can blame Hollywood for this, as landlords and landladies are often chasing after our down-on-their-luck hero who’s just trying to make it by.
“Rent is three weeks late!” they cry out as our hero tries to sneak in through a window or silently tiptoe down the stairs of the creaky building.
While those images don’t exactly spark joy or positivity, there are plenty of positives to being a landlord.
Owning rental property is one of the best ways to build wealth, especially passive income. There is a lot of work that goes into becoming a real estate mogul and you’ll have to wear a lot of hats, from handyman to marketing guru.
Below, we’re going to review some of the key steps involved in building up your wealth through investing and owning rental properties.
The first thing you need to do before jumping into such an endeavor is research. A lot of research.
What are you going to research?
First, you need to find a rental property in your town and decide if you’re going to be working with homes, condos, or apartments. You’ll also want to make sure there’s a market out there for renters.
The good news is that plenty of people, especially Millennials, are renting more and more as it’s currently seen as a cheaper option than buying.
You’re still going to want to look into specific areas in your town, find the hot spots, and start crafting a business and marketing plan for your rental business.
Diving headfirst into the real estate world can be scary, especially because there are so many things to learn.
You’re going to have to learn about rental laws and rights, home repair, mortgages, and so much more. While you may have a strong idea about accounting and bookkeeping, you may not have the slightest idea of what to do when fixing up a property.
That’s why it’s good to seek out professionals and make connections. Instead of trying to fix the sink and toilet yourself, reach out to plumbers in Kansas City or wherever you are investing, and find one that will work with you.
Connect with a real estate agent that specializes in rental properties to help you find exactly what you’re looking for and can help you formulate a plan.
There are plenty of templates out there for coming up with the perfect business plan and making one as soon as possible is the best benefit for you and your real estate business.
One of the biggest obstacles for creating a business is the financial side and making sure you have enough money to invest.
One of the best tips is to invest money sooner rather than later by setting aside a portion of your income each month to use as an investment tool. That way, your investments will grow over time and you can continue to invest more money into your business.
Of course, the goal of any business is to make money. While making money is seen as a short-term goal, building wealth is definitely part of the long-run.
It is possible, in some circumstances, to make money in as few as six months with your rental property business but that shouldn’t be your goal.
Building wealth through rental properties is all about increasing their value and holding on to properties for a very long time. Selling your properties should always be the last option (unless you’ve decided to go the house-flipping route).
One of the big reasons that investing in real estate property can be such a promising field is because of inflation. Simply put, people have always and will always need a place to live.
Properties, as a whole, increase in price in correlation with wages and taxes. But, what you pay on them won’t increase thanks to fixed-price mortgages.
While your grandparents may have been able to see a movie for a dime, it now costs an arm and a leg to catch the latest flick.
But with a fixed-rate mortgage, you’re going to be paying $1000 per month on a property today and the same amount a decade from now, all while the value of the property is increasing.
Your money is able to go just as far then as it does now. That’s a large part of wealth-building and a huge reason why patience is key when building up your rental property empire.
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- Building Wealth Through Investing in Rental Properties - February 18, 2020