The Benefits of Owning Rental Properties

Most adults know someone who owns rental properties. Regardless of whether this person manages the properties him or herself or contracts them out for management by a property management company, owning rental properties can be a fantastic way to drive additional income and create a level of financial freedom.

5 Big Benefits of Owning Rental Properties

1. Income potential

The income potential is huge with rental properties. Depending on where you are, what type of property you own, and what the housing market is like in your area, it’s possible to earn a large sum of money from renting your property out each month. This is especially true if you hire a property management company to handle the actually maintenance and upkeep of the home and you simply enjoy the passive benefits.

2. Equity

Homes are generally appreciating assets, and maintaining your home well, completing needed repairs, and adding value to the home through updated appliances, relevant remodels, and the like is a fantastic way to build “Sweat equity” in the home. In addition to fetching higher rent prices, homes with a high level of “Sweat equity” are also more valuable if you decide to sell them, down the road.

3. Learning

Even if your primary goal is not to become a real estate baron, owning rental properties is a fantastic way to boost your real estate knowledge and become a savvier real estate investor.

4. Future possibilities

If you have a family, owning rental properties now can translate into owning your childrens’ homes in the future. Many parents choose to rent their additional properties out until their children are older, at which point they allow them to live in the properties or simply gift the properties to them.

5. Added property value

Home prices have been growing at a rate of roughly 5.6% year over year, so now is a great time to invest in rental properties. While there’s never any guarantee that a rental property will maintain its value, now is generally a good time to invest in rental properties since the values are likely to increase in the coming years.

While there are dozens of things to value about rental properties, many homeowners are primarily drawn to the income potential, freedom, future possibilities, and equity owning rental properties presents. By keeping a home up well and ensuring that it appreciates rather than depreciates in value, home owners can secure a solid investment for themselves and their families.