Is It The Right Time To Invest In Rental Property?

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Published: 25th June 2015
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In days gone by, investing in real estate was a no brainer as a mainstay of your overall investment portfolio. For decades it was a given that the equity in your property would continue to rise as a matter of course as your mortgage gradually shrank. It was considered, “The American Dream” to own a home and grow your nest egg for a comfortable retirement.

The savvy investor took full advantage of the good times and did quite well. They acquired, renovated and flipped properties for a quick profit or used them for long-term rental income. The profit margin was so great that any mistakes they might have made were far overshadowed by the on-going explosion in equity build up.

Then in 2007 everything changed. The housing bubble began to burst and much like the dot-com bubble a few years earlier where the NASDAQ Composite lost 78% of its value and fell from 5046.86 to 1114.11, we saw all this growth was just on paper.

Many of these investors, whether large company's or individuals lost a large percentage of their profits or wound up upside down. So, does this mean that investing in real estate is dead? Like anything else, when the landscape changes you either adapt or fade away!

The main advantage real estate has over most other forms of investing is that it's tangible, Thus the “real” in real estate. People need to live somewhere, so it's a commodity that's not going away. But what's the best strategy to pursue in today's marketplace? Unfortunately, the days of the buy, renovate and flip for quick profit won't be seen again for some time and unless you plan to build a home from scratch, acquiring vacant land doesn't currently offer viable income growth potential.

So, is there opportunity in the current real estate market to significantly supplement your income or even make it your primary source of income? The answer is an emphatic yes, and now is the time to act.

Here's why: In the wake of the housing meltdown, an enormous amount of families have lost their homes to foreclosure and renting has become a viable option. Home prices have risen for six consecutive months, leading many to conclude that the U.S. housing market is finally on the road to recovery. But, the result has been to balloon the amount of renters to more than 100 million, roughly a third of the U.S. population. This, coupled with mortgage interest rates still at pretty much an all time low, investing in rental property is the way to go.

Overall rental costs have risen 4% over in the last few years and per a 2011 report by “CNN Money” a double digit increase in rental costs is forecast.

Obviously, anyone jumping into this arena without doing their due diligence would be extremely fool hearty. It's okay to be cautious if you've never done this before, but be assured that there are still profits to be made, as many have discovered.

First, you need to lay out your goals. What do you hope to accomplish by buying your first property? Do you think you will want to expand from there? What about dealing with tenants? Should I hire a property management company to handle things?

In general, you can be more profitable more easily with a multi-unit property than with a single family home. You can also save some money and get a better loan if you're able to live in one of the units yourself.

These are some of the main considerations to take into account. Getting into rental real estate is a great business. Set yourself up for success by educating yourself and taking action, and you'll be well on your way to success!

Good Luck!

Jim Gilberti is a reviewer of the latest trends in financial opportunities. For detailed info about real estate rentals please visit Also, check out our full list of the hottest current money making opportunities at

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