Invest in Rental Properties - The 5 Best Reasons
A common goal shared by most of the world’s population is the desire to build wealth and live comfortably. While there are plenty of way to go about achieving this goal, many turn their eyes towards the world of real estate investing in order to make this dream a reality.
Why do people decide to invest in rental properties exactly?
It is very simple – they do it because it works.
Of course, real estate is about more than just buying and selling properties. In fact, one of the most common forms of real estate investment involve buying and holding homes for extended periods of time and renting them out to people in need of housing.
So, why are rental properties such a popular investment? And why should you consider using them to help build your wealth and achieve financial freedom? Let’s take a look at the top five reasons you should invest in rental properties.
But first, in order to invest in rental properties, you need to secure the funds. So, in order to help you get the best financing in order to invest in rental properties, click the link below to book a free strategy call with our team at LendCity today.
Housing is Always in Demand
The first reason you should invest in rental properties is simple, housing has always been and will always be in demand. It is a simple fact that people need a place to live. So, unlike a niche stock option or a promising startup tech company, real estate has a constant staying power that can help you make money.
Additionally, due to student loan debt and lower average credit scores, the average age that Canadians buy their first home is continually rising. This means that the market for young people trying to find an apartment or house to rent is constantly growing.
Even amongst investors, the demand for quality rentals is strong. As a result of this demand housing prices consistently rise each year, making each investment property more valuable as time goes on.
Discover How To Buy Unlimited Rental Properties With This Step By Step Guide
You Can Create a Diverse Portfolio of Rental Properties
You know the saying; you should never put all of your eggs in one basket. Well, the same is true for when you invest in rental properties. Fortunately, it is not hard to build a diverse portfolio of vastly different rental properties.
From single-family homes, to duplexes, to apartment complexes and beyond, your options for residential real estate investing can vary incredibly. Beyond that, factors such as city, neighbourhood and street can create large differences in the price of rent and the type of tenants you will be able to get with each property.
By buying rental properties of varying styles and renting them across multiple demographics, you increase the odds that your finances will be safe in the event of a downturn in demand, or value in any particular area.
You Can Choose Whether to Be Hands-On
Deciding to invest in rental properties create an interesting lifestyle for investors because you have the option of whether you would like to take a hands-on approach or sit back and delegate and hire out the work in your stead.
For people who like a sense of control and direction from their investments, you can choose to tackle the majority of the process yourself. You are free to go out and hunt for properties yourself, as well as inspect them and analyse their value on your own. Additionally, once you purchase the property you can choose to do your own renovations and updating – provided you have the skills required to do so. Finally, when it comes time to decide on a property management strategy, you can decide that you would like to do your own management and keep an eye on your properties by yourself. (While your portfolio is still small enough to do so alone.)
You also have the option to bring in a team of professionals to help you do the work so that the majority of the stress is taken off of your back. For example, when it comes to house hunting and analysing the profitability of a rental property, you can hire a realtor to assist you in buying the best home for your individual strategy. As well, once you find tenants for your properties, you can hire professional property managers to come in and help you tackle tenant concerns, collect rent payments and handle maintenance.
They Are (Usually) Stable and Reliable
Real estate is a frequently considered a strong investment with a high potential to survive economic hardships. Even through hardships such as the 2008 recession and the Covid-19 pandemic, real estate markets survived and manage to quickly bounce back greater than before. In fact, instead of taking a dive, plenty of new Canadians used the pandemic to invest in rental properties.
For example, during the 2008 recession, property values across Canada took a substantial hit, averaging 10-25 per cent drops across the country. However, by the end of the next year, the majority of markets had already recovered and grown above the value they had fallen from.
This happens because when markets take a dive, investors choose to ‘buy the dip’ and take advantage of the discounted product that has entered the market. As this investor demand comes back in, the property values quickly reinflate to where they used to be until the economy restabilizes.
There is More Than One Way to Invest in Rental Properties
Finally, another reason you should invest in rental properties is the fact there are multiple ways to invest in rental properties. While most people think about long-term buy-and-hold investments, there is also the option to invest in short-term rentals such as Airbnb, VRBO and old-school vacation homes.
Each of these strategies come with their own unique profit system and advantages. So, you should consider the advice of reason number two and diversify in order to protect your investments.
If you would like to learn how you can finance unlimited rental properties or would simply like to get started as a new investor, give us a call at LendCity. Our team will gladly help you find the answers and get you the best available rates for each of your rental properties.
You can reach us at 519-960-0370 or visit us online at LendCity.ca. Alternatively, click the link below to book a free strategy call at the link below.