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The Best Ways to Make Money in Rental Real Estate – Fast!

Miniature Houses on a Piles of CoinsWhen investing in Hot Springs Village rental properties, the key to long-term success is in knowing how to generate income through your investments, regardless of how long you’ve been in the industry. According to recent data, individual real estate investors own almost 75% of all rental properties in the U.S. And, with home values on the rise in markets nationwide (more than 19% since 2020!), buying real estate is both a popular and a potentially profitable way to build wealth.

Don’t fall into the trap of thinking that investing in rental properties will immediately make you rich. Just like any other investment, there are other factors involved. Nevertheless, with the proper set of information and skills, anyone can easily learn how to make money in rental real estate quickly.

Quick but Risky

The approaches that generate more profit in real estate investing will require more time, obviously. But, there are ways you can make a quick buck through real estate. House flipping is a great way to do just that. Yes, it does come with some pros and cons. House flipping, for instance, gives you extra profit each year.

The process of locating, buying, renovating, and then re-selling just one property can be very lengthy at times. In that time, a lot can happen. For example, unforeseen repairs. Or, even a sudden downturn in the market. To create a steady income stream, it is important for you to be looking for investment properties, and to have a couple of renovation projects underway. This will most likely generate stress and take away most of your time.

Profitable (Maybe) and Volatile

One other way you can grow your profit by investing in real estate is to buy property as a vacation or short-term rental. Some investors like the idea of charging far more than long-term rental rates for a property, especially if it is near popular vacation areas or destination spots. The difficulty with owning these rentals is that owners are subject to all of the ups and downs of a volatile market. Should tourism decline, for instance, or events don’t push through, your property probably won’t be as profitable.

When it comes to short-term or vacation rentals, you need to have a lot of tenants in order to have an income that is relatively steady. The tenant screening process, though, is such a pain to handle. Given how many people are going to be going in and out of your property weekly, wear and tear are going to be more evident. Wear and tear equal maintenance and repairs; meaning, more costs on your end. This will inevitably lead to loss, especially when the competition is high and the hotels are cheap. This will make it difficult to rent out your property.

Profitable and Stable

The buy-and-hold approach to real estate, however, offers just as much profit as these riskier methods. Plus, you don’t get all of that stress in your life! There’s a good reason as to why most investors almost always go for long-term rentals. The freedom that long-term rentals like single-family rental homes offer allows investors to spend less time keeping an eye on their properties from day to day. It’s normal for tenants in these rentals to stay for a couple of years; especially now when there are already so many renters who are looking for rentals. This will lessen the burden of having to market or screen tenants.

What is more, tenants in long-term rentals tend to take better care of the property and can be relied on to help with regular maintenance tasks. Sadly, the same can not be said of vacation or short-term rentals. With long-term rental properties, rental income is far more regular and steady, and over time, property appreciation can make owning long-term rentals one of the best ways to build real wealth.

Want to make money by investing in rental real estate? If so, you are who we are looking for. Our Hot Springs Village property managers work with investors like you to help find, assess, and manage quality single-family rental properties. Contact us online to learn more!

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