Retirement is just a dream for many, but investing early and wisely in things like quality rental properties can make relaxing retirement years possible. The best-selected rental properties can return more money than stocks, and matched with a savings plan and modest spending habits, rental properties provide great opportunities to generate income into your golden years. With the help of a property management company, those years can even be spent traveling or living abroad while your rental property provides steady income for you.
Not everything in rental property ownership goes smoothly though, and shifts in the housing and rental markets can create a surplus of properties, making it harder to find quality renters or let go of under-producing properties. Investing in “money pits” will drain your savings instead of cushioning them, and unpaid rent results in negative cash flow. Avoid rental property nightmares by inspecting and researching any investment property before purchasing it.
A rental property is an illiquid asset, so unlike an IRA, it cannot be tapped into in case of emergencies. On the other hand, a well-kept property with paying tenants can lead to tax advantages and yearly-increased rent in a flourishing market. Sometimes it may take longer to achieve the amount of return on your investment that you would like, just make sure the rent charged per month covers the property taxes, mortgage and needed repairs. Think also about long-term plans for your rental property. Will it be an attractive buy for other investors if you decide to sell? Extend the production of profit from your rental investment by employing a property management company to handle repairs, inspections, rent collection and all other associated duties that come along with managing your investment- ultimately increasing the chances that you will reach that comfortable retirement milestone.