What They Don’t Tell You About Investing in Rental Property
Jul 02, 2021 | Jeremy Duprey
Investing in rental property is often touted as the best way to earn a steady income. You have monthly rental payments coming in and all you do is sit back and collect the money. While this sounds like the dream for most people who want to invest smart, there are a lot of things you don’t hear about this kind of investment.
Managing a Rental Property
Managing a rental property isn’t all passive income as some would lead you to believe. It’s a full-time job, depending on how many units you own. You’re responsible for getting rent payments each month, sending reminders for anyone who is late, and taking care of all repairs to the property. You can get calls on weekends or even in the middle of the night that you must deal with. The challenges increase if you have multiple tenants.
Returns are Long-term
Real estate can be a good investment, but it’s not a get-rich-quick scheme. You won’t see profits overnight even though tenants pay on a regular basis. Much of those payments go toward the mortgages, and the rest may go toward maintenance and repairs. Your profit margin is very low in the early days of owning rental properties. Many landlords have full-time jobs for an income with the goal of getting a return on their rental properties in the future.
Good Tenants are Hard to Find
Renting a property isn’t as easy as it sounds. Even if you live in an area with great demand for rentals, you must find good tenants who will pay their rent on time, won’t cause damage, and won’t leave right away. This can be challenging, especially for an inexperienced landlord. You may need to conduct background checks, create a list of rules to be followed, and set up contracts the tenants must agree to. You’ll have to enforce these rules if the tenant oversteps their boundaries. If you have problem tenants, you may need to have them evicted, which can be a long, difficult process that must go through the court.
Selling Instead of Renting
If you find yourself as the owner of a rental property and are feeling overwhelmed, the simple answer may be to sell to a company that has the time and experience to manage a rental. Contact Hometown Development to take this rental property off your hands. We are experienced local real estate investors with the knowledge and time to deal with tenants. We are looking for properties just like yours. Contact us today at 616-379-3090 for your free cash offer.