Buying stocks and bonds can be an influential investing strategy, but there’s one kind of investment that stands out for its low risk and high reward. Real estate investing can include buying a property with the intent to flip it, but buying a rental property will turn into passive income you can put toward a brighter future. You’ll need to find the right property, maintain it, and provide for the tenants, but in the end, owning a rental property could be a valuable investment.
A Guide to Real Estate Investing
Real Estate Appreciation
Buying a house in the right location is one of the few investments where if making a profit due to appreciation isn’t guaranteed, it’s likely. Appreciation is when an asset increases in value over time. The ever-increasing demand for single family homes and changing inflation and interest rates mean rental property buyers can sell their properties in the future for more than what they bought them for. They also have the option to leverage the home to pay for ongoing future expenses, such as retirement or a child’s college tuition.
One of the biggest attractions for buying a rental property is the prospect of a steady stream of additional income without getting a second job. During the early years of real estate investing, your tenant’s rent money will be put toward the property’s mortgage.
If you bought in an area with a high demand for rentals, you may be able to adjust the monthly rent to allot yourself a few hundred dollars profit on top of the mortgage payment. Once the mortgage is paid off, that rent money turns into more profit (minus the minor expenses of maintaining the property).
Owning a rental property isn’t the right choice for everyone, but it can be a wise financial decision. If you’re considering investing in Wisconsin real estate, talk to the real estate investing professionals at Coldwell Banker. Call them at (715) 424-4800 or visit their website for more information.