Regardless of how long you’ve been investing in Bangor rental properties, the key to long-term success can be found in making a profit out of your investments. According to recent data, individual real estate investors own almost 75% of all rental properties in the U.S. And, with home values on the rise in markets nationwide (more than 19% since 2020!), buying real estate is both a popular and a potentially profitable way to build wealth.
Don’t think that investing in rental properties will automatically mean good money. As with all investments, it takes time and experience. Don’t let that intimidate you, though. With just a few tips and tricks, you can get started on the journey of learning how to make money in rental real estate quickly.
Quick but Risky
Even though many of the more profitable approaches to real estate investing require a length of time, there are some ways you can earn a quick buck in real estate. House flipping is one of those ways. It does come, however, with some pros and cons. To illustrate, house flipping makes it possible for you to turn a profit in a year.
The process of locating, buying, renovating, and then re-selling just one property could take up to a year or so. In that long period, there may come certain repairs that are unforeseen or a sudden downturn in the market. To create a steady income stream, keep searching for investment properties, and have several renovation projects going on at the same time. This will cause an enormous amount of stress and it will take up a chunk of your time.
Profitable (Maybe) and Volatile
Another means to make fast money by investing in real estate is to buy property as a vacation or short-term rental. Some investors like the idea of charging far more than long-term rental rates for a property, especially if it is near popular vacation areas or destination spots. The negative side of owning these rentals is that you are subjecting yourself to a very volatile market. If tourism declines, this could lead to events being canceled. Things like these could inevitably affect your property and make it unprofitable.
The thing with short-term and vacation rentals is that you need many tenants to earn a steady income. Be prepared for the super long process of screening tenants! Wear and tear is something to take seriously, especially when you have many tenants going in and out of the property each week. This will lead to maintenance and repairs, and they may cost you a decent amount. If competition is high and hotels are cheaper, you might find it difficult to rent your property to people.
Profitable and Stable
If you want a less stressful option, you can go down the buy-and-hold approach to real estate. It’s just as profitable as these riskier methods, too! For a long time now, many investors have chosen to invest in long-term rentals — for good reason! Long-term rentals, like a single-family rental home, for example, don’t need as much attention on a daily basis. Tenants in these kinds of rentals are more inclined to stay longer, especially when there are already so many renters these days. Long-term tenants mean less marketing and screening of tenants.
What is more, tenants in long-term rentals tend to take better care of the property and can be relied on to help with regular maintenance tasks. Not so of vacation or short-term rentals. With long-term rental properties, rental income is far more regular and steady, and over time, property appreciation can make owning long-term rentals one of the best ways to build real wealth.
If you are interested in the possibility of making money by investing in rental real estate, you’re in luck. We got you covered. Our Bangor property managers work with investors like you to help find, assess, and manage quality single-family rental properties. Contact us online to learn more!
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