It is quite common to see people thinking about real estate investments and assuming that it can only be done by owning a piece of land or buying a property and selling it back. Yes, buying a particular property and then selling it back into the market for a profit is the primary way people make money from real estate investments, but that’s not the only way.
Real estate rentals are probably ignored by a lot of beginners in this market because they are always looking for something big. On the other hand, rental income is small but it can provide you with a great comfort in your post-retirement age. According to Anton Senderov, “Most people who win lotteries want a lump sum payment, but only a few go for monthly reimbursements. The truth is, those who want to be paid monthly are thinking long-term. You can do the same when you invest in real estate.”
Let’s take a look at why you should consider rental investments in real estate.
Doesn’t Keep Your Cash Stuck
When you invest in a property, which could be a piece of land or building, you have to stick with for some time for it to give you any return. Don’t forget that most residential plots are low-prices because they are located outside urban areas and far away from the city. This means, it can take up to a decade for your investment to give you a good return. On the other hand, when you have a property that you have rented out, you get to earn from it every month. Whether you are working a job or running a business, you can always rely on this monthly income to keep you afloat.
“Don’t compare the size of the return on rentals and when you purchase and sell a property. What you should really compare is the safety and risk minimization factor that comes with monthly rental income,” says Anton Senderov, who is considered a real estate investment tycoon today.
Let’s You Ease Your Mortgage
You can’t think about paying your mortgage by buying a property today and selling it later. Why? Well, you can’t buy a property today and sell it tomorrow for a huge return. If you want to earn anything on top of what you have already invested, you will have to wait for many years. Of course, you can’t hold your mortgage payment until that time. However, when it comes to making money from rental real estate, you are getting enough income from your rental every month that you can easily pay your mortgage. In fact, you might have some money left that you can use for your savings.
Don’t forget that once you have rented out your house or vacation rental, the monthly rentals are not going down at any point. As time passes, the rental income will continue to go up while your mortgage payment remains the same.
You Can Start with Little Investment
One of the things that make rental real estate so attractive is that you can start with a very small investment. So, if you already own a house, you could give a portion or part of it on rent. All you will have to do is to find a way to keep it separate and private. At the same time, if you are thinking about renting out the upper portion of your house, you might just have to keep the stairs private. With this small move, you can test the waters and know if rental real state is really your thing.
Anton Senderov says that people often like to see a lump sum payment and start making plans around it. Instead, what they need to do is to look at its downsides too. Only then they will be able to truly discover the value that comes with rental real state. It’s really a way to get set for life for many people.