A Renter’s Market: Why Investment in Rental Properties Pays Off Big

The post-COVID real estate boom has experts thrilled and terrified in equal measure, as the market hasn’t been this good since the last major real estate crash. The business of buying and selling property is lucrative but inherently unstable, as it depends on the majority of consumers having money to spend on owning housing. Unfortunately for those who are hoping this sudden uptick in sales is a boom and not a bubble, very few Americans have that kind of capital on hand, especially after the pandemic.

No, it’s a renter’s market out there now, as few Millennials actually have the capital to own their own homes. Those that do, even more interestingly, are still choosing to rent for a variety of reasons. As such, while other realtors are foaming at the mouth over this new real estate gold rush, savvy realtors such as yourself should consider investing in rental properties. 

In addition to providing constant, steady streams of income as opposed to one big payout, rental properties are more likely to be tenanted and sought out in the event of a market crash, or even another disaster like the pandemic. Rental properties are the next big investment for the savvy realtor, and while it never hurts to have your hand in more than one pot (as you can still invest in owning property for sale), you should definitely consider moving into the rental market. 

If any of the above has piqued your interest or seemed more sensible than the self-serving predictions of market analysts who want to stave off panic, here are a few things you’ll need to do to get into the rental market and make a killing in the process.

Invest in A Diverse Portfolio of Property

When you’re first starting out, you may not be able to acquire a slew of properties right away, unless you have connections as an already established agent and put some of your for-sale properties into a different market. You may not even have the assets to get the deed to one, as a beginner in the field; For that, you’ll probably want to seek out a rental property loan lender that will work with you to get you the best rate. Once you have enough capital to obtain at least one property, the real work can begin.

You’ll want to choose to invest in property that’s in well-frequented areas, properties that are within driving distance of large metropolitan areas or close to major cultural centers, as well as properties that will take the least amount of effort to renovate (more on that later). While you will eventually need a diverse portfolio of offerings to make it in this business, as a beginner, you can start small: one or two homes in the suburbs, or duplexes and town homes near the city. You’ll also want to carefully research the surrounding area, making sure that it’s safe, as well as any amenities that are likely to attract house-hunters.

Flipping on a Budget

Once you have your property, you’ll need to evaluate it from there, taking into account all of its built-in features (things that are likely to attract customers) and all of its drawbacks (things you’ll likely have to put money into to avoid chasing customers away). While ideally, you’ll avoid money pit issues such as cracks in the foundation or sewage line damage, as you’ll have scouted out the property beforehand and gotten it inspected, there will still be things you’ll probably have to spend money on to make the unit as customer-friendly as possible. 

You don’t have to go big on these things either, so avoid breaking down walls to install walk-in closets unless you’ve determined that these larger-scale renovations are worth the cost. 

There are Loads of Options on the Market: Make Sure You’re the Best

A great deal of strategy goes into making it in the rental property market, and success will require a great deal of investment from you as well. But with the right tools and the proper strategy, you’ll soon find that money flowing back into your pockets, with double, even triple the dividends.