No matter when you started investing in Winchester rental properties, you can always learn how to gain more through your investments — that is the key to long-term success. 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 fall into the trap of thinking that investing in rental properties will immediately make you rich. It is, after all, an investment like any other — it comes with variables that have to be taken into consideration. Nonetheless, with access to a wealth of resources, anyone is capable of learning how to make money in rental real estate quickly.
Quick but Risky
It’s true that the more profitable approaches to real estate investing come with time, there are other ways to make smaller profits with real estate. What, you may ask? House flipping. Yes, it does come with some pros and cons. For instance, house flipping can turn a profit on a yearly basis.
The process of locating, buying, renovating, and then re-selling just one property can require a certain number of days, weeks, or years, even! 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, you will need to be updated with local investment properties, as well as have a few renovation projects on the side. 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. A big drawback to these rentals is that the owners will have to rely heavily on a volatile market. Your property could end up not being profitable if tourism declines, or even if a couple of events don’t push through.
When it comes to short-term or vacation rentals, you need to have a lot of tenants in order to have an income that is relatively steady. The tenant screening process, though, is such a pain to handle. Wear and tear is something to take seriously, especially when you have many tenants going in and out of the property each week. More in and out means more maintenance and repairs — another set of expenses. This could lead to loss, especially if the competition is high and the hotels are cheaper. This will make renting your property more difficult.
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 rentals are most likely to stay long-term. Given the increase in the number of renters these past few years, it’s most likely going to stay that way for some time. This will lessen the burden of having to market or screen 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. With vacation or short-term rentals, that’s simply not the case. 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.
Want to make money by investing in rental real estate? Let us help you. Our Winchester 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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