There are many advantages and benefits to renting your property which are exciting to explore. Not only will you bring in a passive income. But you can also set it up so you can flexibly move back in, instead of selling the place.
Yes, renting can be a stressful experience. But it’s one where the benefits outweigh the negatives (if done correctly).
For a lot of people, once you purchase your first rental property, you’ll want to purchase another until you have a whole property portfolio.
Unfortunately, buying properties is expensive and will require you to save and work hard to be able to buy them.
As you might know, I’m a bestselling author and happiness researcher. I wrote a book called Happy Habits.
In my research, I learned that a lot of happiness comes from learning new things and stretching yourself out of your comfort zone. You can wind up boosting more than your mood. You can boost your income to boot. Basically, if you want to grow your finances – then you must grow who you are – and learn new ways to make money and invest.
Below are six benefits to renting out your property and being a landlord.
One key benefit of rental investing is the passive income that it brings. Yes, initially you will be paying out a large deposit to get a mortgage for your rental property. But once you have tenants, they will be paying a monthly fee to you. As long as your rental fee brings in a positive yield, you will be making a certain amount of profit on your property each month.
This profit can either be used to pay off the buy to let mortgage quicker, or you can use this as extra income. It’s always worth saving some of it for repair works on your rental property. Unfortunately, as with the property you currently live in, there are always small repair jobs that need doing. It is your responsibility to fix any issues that happen in your rented property. The last thing you want is your tenants being unhappy and not living in a comfortable environment.
When buying a property you should always do some research on the local area and investigate the house prices and whether they have increased or decreased. If they have decreased, it may not be the right place to invest in.
The idea is that you buy a place which you feel the property has strong chance of increasing in value. This way, when it comes to the time to sell, you make a good profit off your property.
If you are good at DIY and know how to install kitchens, or redecorate, you could look at buying a run-down property. By doing this you can not only increase the property value instantly. But you will also have a better chance of being able to charge more and make more money off your rental price.
If you want to enjoy the most benefits from renting out your property, it’s is always worth keeping in the back of your mind that the property market can crash. So plan to buy at the right time in order to get the most out of your investment.
If you are planning on relocating for a new job, you may choose to rent your current place out instead of selling it. One of the main benefits of doing this is that if your new job isn’t right for you, you always have the flexibility to come back. Then you can rent out the new property you have bought after you have moved back into your old one.
Just remember that your tenants do have many rights. You can’t just kick them out straight away. Most of the time you will have to give them notice so that they can find a new place to live.
Also, some tenants may make changes to your property so when moving back, you may need to do some DIY to bring it back to how it once was. Any damage that isn’t fair wear and tear can be charged back to the old tenants as well. Meaning? You don’t have to take on the costs. If when moving back you don’t want to rent out your new property, you can always sell it and hopefully make some profit if the value has increased.
Many people have their money invested in many entities, such as the stock market. The property market is something that a lot of people also invest in as it allows them to diversify their investment portfolio.
By diversifying your investments, it not only reduces the risk of something going wrong. But it can also allow you to potentially bring in more income. This will help reduce your stress and bring peace of mind that you are not relying on the performance of one investment.
It may be that you enjoy the property market so much that you want to invest more into it, adding more properties to your portfolio over time. You could always look at different locations and offer short term rentals. In this way, you can stay in your different properties every now and then. You might use them as holiday homes.
It may be that you don’t actually purchase a property yourself. In some cases a family member may have unfortunately passed away, leaving their property to you.
Leaving a property empty could leave it vulnerable and a target to potential thieves or squatters. By renting it out, you have the knowledge that someone is living in it and taking care of it like you would.
Plus, as mentioned above you benefit from bringing in an income on what would have been an empty property.
If you don’t live in a certain area it can be difficult to look after a property that is not lived in. If you want to enjoy the most benefits from renting out your property, then you might need to rely on the neighbors to watch the place – or hire a company.
If you are lucky enough to own multiple properties or a block of flats, then the income you will be receiving could be high enough that it is enough to live off and become your full-time job. This means that you are working for yourself, which brings plenty of benefits with it. You’ll enjoy flexibility, not having to report to someone. Plus you could enjoy a higher earning potential.
Yes, there are also negatives to working for yourself. But the pro’s usually outweigh the cons.
That said, the more properties you own, the more work it brings with it. You will need to constantly be on the ball with things like repairs and chasing late payments.
Becoming a landlord and renting out your properties is an exciting journey. But not one that should be done lightly. Before investing in the property market, make sure you do your research, learning all there is about renting and being a landlord. In most cases is will be a wise decision. Plus one that brings many benefits.