Everywhere you look there are houses for rent, apartments for rent, condos for rent and even commercial properties to be leased. You would think that there must be tons of money to be made in buying real estate to rent, and sometimes that is entirely true. However, there is also a downside to rental properties that often outweighs the advantages, and this is precisely why you should know your options before breaking into that end of the market.
A Realistic Look at Your Bottom Line
One of the biggest problems new real estate investors encounter when breaking into the property management market is that they aren’t really aware of all the issues which can chip away at their bottom line. At full occupancy, a piece of rental property could generate a tidy income. However, that would mean that the property is ready to be occupied with no major repairs to be made. It also presupposes that tenants will pay on time and in full, month after month. These two factors are your greatest concern when seeking a decent ROI, and unfortunately are the two factors which drive new investors out of the market almost before they get their feet wet!
Getting out of the Boat Before You Sink
If you’ve found that unpaid rents, repairs, legal costs of eviction, property taxes and other assorted expenses have zeroed out your ROI, it may be time to get out of the boat before you sink. In fact, the moment you even anticipate being in over your head, you might want to consider getting out of your investment as quickly as possible before your total investment is gone.
"Real estate investing has often generated great returns but it does come with a great deal of risk, particularly if you are a property owner that rents your property," states Max Cash Home Offers, a home-buying company known for purchasing properties within 7 days or less. "We’ve compiled nine investments with potentially better returns than property management. Check them out!"
Take the profit you can get from selling your property quickly, and then consider your options to stay in the real estate market without the problems associated with property management. Believe it or not, there is a whole host of options available with much higher returns, as mentioned above by Max Cash Home Offers.
A Few Safer Investments with a Higher ROI
While you may still wish to invest in real estate without all the problems associated with property management, there are a few options to consider. Perhaps you’d like to invest in real estate property portfolios (managed funds) or become a peer-to-peer lender if you can earn decent interest rates on your loan. Whether you want to invest in your future by furthering your education or launching a new eCommerce business, the choice is yours, but there truly are far safer and more equitable investments than rental properties with all their headaches.
In the End It Can Boil Down to Sink or Swim
One of the most common ways new real estate investors decide to dabble in property management is because they personally want to relocate. Perhaps they need a bigger home, a bigger space for their company or even a totally new location. This presents itself as the perfect opportunity to buy a separate piece of property, hoping to pay for it with income generated from the property being vacated and rented out. If it doesn’t pan out the way you expect, it may be a matter of sink or swim. Get out while you can.
Sell that vacated property and use the profit to invest in something safer and easier to manage. Just ask yourself, do you really want the headaches associated with being a landlord or would you like your money to grow with little intervention on your part? If you’re new to property management, the answer is probably clear. You want to swim, so get out before you sink! And that is the most logical choice you could make.