Why rental properties are wise investments

The real estate market has a lot of avenues you can explore to make money and generate new revenue streams. However, it can be an intimidating arena especially if you lack experience or if you aren’t sure you have enough resources to get started.

Don’t let fear or inexperience stop you from starting your journey. There are modest ventures that can be more lucrative for you in the long run. If you are planning on investing in real estate but you don’t know where to start or if you’re already in the property business and you want to expand your portfolio, perhaps it is time to learn why rental properties are wise investments.

• Leverage

  A great thing about rental properties is leverage. In the simplest of terms, leverage means that you don’t have to entirely fund your investment in a property from your own pocket.

  Banks, other financial companies, and even some property developers can fund 50% to 80% of your venture, lowering the point of entry compared with other real estate investments.

  Another great advantage of leverage is that with financial assistance, you can get a higher return on investments should the value of the property you purchased increases than when you purchase a property completely with your own money. By paying only a fraction of the cost, any rise in value goes to you.

• Tax breaks

  The US government provides a great deal of incentives for potential rental property owners to drive up the number of rental homes its people can use.

  The government considers rental property owners as investors or business owners, giving them a lot of tax breaks and deductions. This only means that you’re going to take home and enjoy more of the money your properties generate.

  Alternatively, you can invest abroad. In Monaco, for example, not only is there no income tax, there are no property taxes as well. If you intend to take in tenants, your income is taxed at 1% of the annual rent including service charges. However, the tenant pays for this tax.

  If you’re really serious about getting into the rental property business, take time to learn more about the government’s laws and regulations and reap the benefits of their incentives.

• A stable and long-lasting source of income

  While you can get impressive results from flipping houses or selling luxury homes, rental properties will provide you a much more stable and a longer lasting source of passive income.

  Once you’ve set your property up and have tenants, you basically just need to wait for money to arrive every month. Regular maintenance of your properties aside, renting out residential homes is one of the most hassle-free business ventures you can undertake. You get maximum benefits and rewards while doing minimal work.

  Also take into consideration that rental properties are often always in demand. Properties in good locations are assured that they will have tenants.

• A way to expand your portfolio

  Rental properties are a great way to expand your portfolio. Over time, you can acquire more properties like apartments, duplexes, and condos, thus creating equity for you or your business.

  What’s more, they all function the same way, meaning you’re not incurring more work and are just adding a bit more properties to maintain, but you’re accumulating more wealth from your investments.

• Rent only goes up

  Acquire and invest in good properties in good locations and you can be confident that your investments will not only return but grow as time passes by.

  A well-run and maintained property can see its rent double or triple in value as time passes and as real estate value rises due to inflation. Rental properties provide great returns as long-term investments for those in it for the long haul.

• You are the boss

  Probably the greatest thing about rental property is the freedom and amount of control it affords you. They are your property and it is up to you how you want to run and manage them – you set the rent, you choose the tenants, you decide how long they can stay in your property, et cetera. You also get to choose how lax or aggressively you want to hit your return of investment goals and adjust the ways in which to achieve them given the mix of properties in your portfolio.

  Or you can also go with a more hands-off approach and get professionals to manage your properties, while you focus on other aspects of your business.

  Not a lot of investments allow this amount of flexibility for its investors.

  Rental properties are a great way for you to get your feet wet in the real estate game or immerse yourself in other aspects of it if you are an experienced player.

Call Spark & Partners at +377.97.777.000 or email hello(at)spark-estate(dotted)com if you want to explore your rental investment options in Monte Carlo, Monaco, and the French Riviera. These are among the best places to invest in real estate.

In the 10 years we have been in the business, we have cultivated long-term relationships with our clients. Our real estate listings include apartments, penthouses, villas, single-family homes, and offices.

Contact us today to get started.