When it comes to real estate investment, there is a lot of investment strategies that you can choose. While some of the strategies are very active strategies, there are also some other passive strategies. With the variety of strategies to choose, you can pick one that suits you the best. Let’s start off from the basic: rental property investing.
How to rental property investing
Rental property investing is probably one of the most strategies chosen by people for real estate investment. The processes start from finding, acquiring, then managing residential property for profits. Real estate owners that implement rental property investing strategy generate profits from monthly rental income. However, owners also need to spend on monthly rental expenses. Hence, the real profit comes from balancing the monthly income and expenses. The higher the monthly income, the better the “cash-flow” is, and the higher the profit.
Just like any other investment, real estate investment also comes with risks. Some challenges in rental property investing mainly contributed by the expensive and rapidly growing market. Good management of the property may bring the investors to the break-even point. Some others could end up spending more on expenses, and even selling the property for less than the original price they bought for.
Renting your property is much more of an active investing strategy. Investors need to research, select and acquire homes and tenants. Not to mention constant maintenance and management on the owned property as well as handling the tenants.