Did you know that more than 44 million American households are renters?
As homeownership becomes an increasingly lofty goal for many, that number is only destined to rise. Because of that, there's never been a better time to invest in rental property.
Of course, investing in real estate can feel daunting and scary if you've never done it before. How can you be sure it will be worth your while?
That's the question we'll be answering today. To discover why investing in rental property is a great idea, keep reading.
Earn Passive Income
Passive income is probably the number-one reason people take an interest in real estate. And there's good reason for that. While generating passive income with a business is rather difficult, with rental properties, it's comparatively simple.
The goal with rental properties is for your rental income to exceed your expenses. This is called positive cash flow because you're earning more from rent than you're spending on things like maintenance and management.
Real estate investing is among the few valid ways to earn passive income. That alone makes it worth considering.
Get Tax Benefits
No one particularly likes paying taxes. But as a landlord, you'll be entitled to certain tax advantages that other people don't have. These consist of deductions that you can take from things like loan payments and insurance costs.
Own Assets That Appreciate With Time
Property appreciation is the process of a piece of real estate increasing in value.
Most things that you buy depreciate or lose their value with time. For example, a brand-new car loses much of its value in the first year of ownership. However, real estate tends to retain its value, and can even appreciate over time.
Real estate is also far less volatile than other popular investment types, such as stocks and cryptocurrencies. As long as you know what you're doing, it's among the safest investment strategies out there.
Increase Your Net Worth
If you'd like to stop being defined by your annual salary alone, you should think about increasing your net worth. Investing in real estate is a great way to increase your own personal value, as well as earn passive income.
Diversify Your Portfolio
There's a reason people say not to put all your eggs into one basket. When you develop an investment strategy, you should plan to make multiple types of investments. That way, if one investment doesn't pay off, you won't lose everything.
If you already invest in something like stocks or gold, real estate is a great type of asset to add to your portfolio.
Make Rental Property a Part of Your Investment Strategy
With that, you now know some of the top advantages of investing in rental property. Whether you've dabbled in real estate investments before or are a complete beginner, getting positive cash flow through rental income is a great idea.
When you do begin investing, you'll want a qualified property manager to look after your rentals for you. Find out how Cleveland Property Management can help you reach your rental investing goals.