It doesn’t matter as much if you just started investing in Locust Grove rental properties; the secret to long-term success is knowing how to profit from your investments. According to recent data, individual real estate investors own almost 75% of all rental properties in the U.S. And, with home values on the rise in markets nationwide (more than 19% since 2020!), buying real estate is both a popular and a potentially profitable way to build wealth.
Investing in rental properties is only the start. Making good money comes with knowing how to handle those investments. Just like any other investment, there are other factors involved. Don’t let that intimidate you, though. With just a few tips and tricks, you can get started on the journey of learning how to make money in rental real estate quickly.
Quick but Risky
It’s true that the more profitable approaches to real estate investing come with time, there are other ways to make smaller profits with real estate. House flipping is one of them. It’s not all that easy, though. It still has its own pros and cons. As an example, house flipping allows you to make extra profit annually.
The process of locating, buying, renovating, and then re-selling just one property might go on for a very long period of time. In that time, a lot can change. For example, you could discover repairs that are necessary or a downturn in the market. To create a steady income stream, you will need to have your eyes peeled for investment properties, and maintain at least a few renovation projects at a time. This spells both stress and time.
Profitable (Maybe) and Volatile
Another option to grow your income through investing in real estate is to buy property as a vacation or short-term rental. Some investors like the idea of charging far more than long-term rental rates for a property, especially if it is near popular vacation areas or destination spots. A big drawback to these rentals is that the owners will have to rely heavily on a volatile market. A lot could happen when there is a decline in tourism or when an event doesn’t go as planned. This could render the property not so profitable.
When it comes to short-term or vacation rentals, you need to have a lot of tenants in order to have an income that is relatively steady. But, the screening process for these tenants will take up the majority of your time and energy. It’s also inevitable to experience some noticeable wear and tear, given the number of people going in and out of the property every week. This will lead to maintenance and repairs, and they may cost you a decent amount. If competition is high and hotels are cheaper, you might find it difficult to rent your property to people.
Profitable and Stable
There are less riskier methods, though; like the buy-and-hold approach to real estate. It can be just as profitable, and without all the problems that come with risk. A good number of investors have stated that they choose to invest in long-term rentals. They have a good reason for doing so. Long-term rentals, such as single-family rental homes, require far less attention on a day-to-day basis. Tenants in these kinds of rentals are more inclined to stay longer, especially when there are already so many renters these days. This means that you don’t have to worry so much about marketing or finding tenants.
What is more, tenants in long-term rentals tend to take better care of the property and can be relied on to help with regular maintenance tasks. This does not apply, however, to vacation or short-term rentals. With long-term rental properties, rental income is far more regular and steady, and over time, property appreciation can make owning long-term rentals one of the best ways to build real wealth.
So, are you looking to gain a profit through investing in rental real estate? If so, you are who we are looking for. Our Locust Grove property managers work with investors like you to help find, assess, and manage quality single-family rental properties. Contact us online to learn more!
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