Rental Property
Rental Property
Rental property investing is the most standard form of real estate investing. The goal is to purchase a property with the purpose of placing a tenant inside the property to pay for the mortgage payment, future capital improvements and the investor’s profit. The unexperienced investor will say that this is for cash flow, but in fact this is the lowest performing return of rental properties. It’s the long term appreciation, leverage, debt paydown, and depreciation that sets apart rental property investing. Any time you rent it’s important to understand state and municipal statutes and regulations on renting. Visit the resources tab on the top right of our page for information on laws and regulations. Rental property investing can be quite active or passive depending on the systems and level of management put in place. The more systems the more passive, but less returns.
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Returns
6
Capital
3
Term
8
Passivity
6
Pros
Passive or Active Flexibility
High Leverage
Low to Moderate Capital Requirements
Tax Depreciation
Passive Appreciation
Cons
Generally Long Term
Potential for Vacancy
Property Management Required for Passivity
Government Regulations