House flipping has become such a common method that investing in rental property is nearly boring by comparison. The allure of the flip is easily understood a visible investment, artistic renovations or add-ons, pushing the value up as high as they can but, most importantly, the glint of the immediate profit.
A flipped home pays for itself immediately and also leaves enough of a surplus to make the purchase have been worth it. There are even Television shows showing it! Why then, would anyone want to consider renting out instead of selling at the same time? There are a whole bunch of reasons.
To begin with, there is no for sure that a purchase will take place immediately, especially in the middle of an economic crisis. While there will almost always be a market for quality properties that are a good value, more and more home seekers are thinking about whether or not to pay less by renting which means the market is or will be flooded with potential tenants right away.
While it might be true that a turned around house covers its own expenses (and then some) on the short term, it is also a fact that the correct rental property will pay for itself again and again in the long run. Finally, a sold property generates a solid amount of cash where on the other hand a home generates a steady stream of money over an extended period of time, offering a kind of security that even the most lucrative of house flipping careers cannot offer.
Deciding to invest in rental homes requires knowlege, financing and a long term commitment. An investor should be aware of the types of properties he can invest in (one family houses, condos or multifamily housing units) their respective pros and cons (amount of your full commitment they have to have, potential income they create) and not least of all the local and global real estate market (types are in high demand, what is the normal price of rent). Under the right circumstances and with the correct person it can become a valuable and extended source of money.
Jason Myers is a professional writer and he writes as a hobby about real estate investment. He’s also interested in real estate financing.