Long-Term Rental Income
The most important benefit of renting out your investment property rather than flipping it is the monthly rental income that you will gain from it. You can start making money from your rental property as soon as you get it in a rentable state and put it out on the market. As long as you are able to attract and retain tenants, you will be getting cash every month. Thus, investing in rental properties is an excellent way to secure your financial stability.
Paying for Your Mortgage
If you decide to buy a rental property through a mortgage, you don’t have to worry about the monthly payments as in a sense your tenants will be covering your monthly dues to the bank. A successful real estate investor has to make sure that the rent he/she is able to charge for his/her house exceeds the expenses associated with buying, running, and maintaining the property. A positive cash flow is a must with rental properties.
Easier to Finance
Speaking of mortgages, financing rental properties is much easier than financing fix and flips. Banks and other lenders like the fact that you will make money from your property so they are more inclined to give you a loan at a reasonable interest rate.
Natural real estate appreciation will help you make even more money from your rental property when you finally decide to sell it. In this way, you get richer not only in the short term through rental income but also in the long term through appreciation. And you don’t have to do anything to benefit from this type of appreciation. It just happens – in nearly any real estate market – while you hold on to your property and rent it out.
Growing Your Investment Portfolio
As long as you have a positive cash flow property, you can use the extra cash to save up for a down payment on a second rental property. The more properties you hold as a real estate investor, the faster you will be able to save the money for new properties. That’s how rental properties offer you a way to expand your real estate investment portfolio without having to spend money from your pocket. Before you know it, you can be the proud owner of a bunch of rental properties and even be able to quit your 9-to-5 job.