Buying Rental Property is one of the best ways to establish wealth over time. There is an old saying: ‘No more land is being created”. Whether or not it is geological movement, it is true, land is stationary and that is a good thing. Brick and mortar opportunities have demonstrated to be a failsafe investment.
The primary reason is because there are several income streams unlike other financial investments. Those income streams have a far lower probability of going away. Unlike investing in stocks, commodities, and bonds, there is a small amount of monitoring that is required to make certain your investment is continuously producing. There is also no stress of your property going down because of a computer cursor.
When buying rental properties, whether single family or multifamily dwellings, you are usually guaranteed to make money. Let us look at where the funds comes from. First, if you have rental income, within time that income slowly increases although your mortgage remains the same. Then there is equity. As rental income is entering and you are using it to pay off the existing mortgage, your equity is growing.
You can utilize that collateral to purchase more properties. Banks love to use real estate as collateral and will usually take you seriously if you are seeking more capital for investing. This can be a profitable income stream. Of course, you will also gain a boost in property value. Buying rental property can be a really smart move, but you have to know what you are doing.
Typically, property values increase significantly every 10-12 years. Imagine, while you are paying off your existing mortgage, the equity is growing without you doing anything. People will always need homes. That is all the motivation you need to start investing in residential properties.
There has always been a demand for property and you will have the supply. The risk is usually small in comparison to other other investments. Is it easy buying rental property and managing it? That depends largely on you. It can be difficult if you are just starting. However, once you have acquired a few properties, the sky is the limit. Buying rental property can be a fun and profitable experience.