Rents are rising at a rapid pace in today’s market because of tight inventory levels and higher prices. For tenants, this is not good news. But if you own two or more properties right now, can you cash in on the trend and use it to your advantage? Yes, so many people have taken this opportunity and have turned into landlords. Instead of selling their homes, they have rented them out to tenants and are earning a significant amount of rental income from them.
There are so many homeowners who buy a new house but never put their old one up on the market. Instead they rent them out and enjoy the advantages of being a landlord.
Let me tell you a story of smart, young lady. She refinanced her mortgage in 2013 and got a new interest rate of 3.25% for a 30 year term. She purchased another property, but did not make any attempts to sell her home. Today her old home generates an income worth $1,100, which is an amount greater than her current expenses. Plus this income stream has also made it easy for her to pay the mortgage on her new home.
A survey states that 19% of today’s homeowners refinanced their mortgages in the period between the 2011 and 2013. At this time, the rates were around 3.4%. All these individuals have to make monthly payments that are not so high and are less than the rents they can get on their old homes.
As can be seen, the math involved will favor most of people right now. Rents have increased by as much as 20%, whereas home prices are still less than the values before the financial crash. If there is anyone who is still underwater on their homes, they might consider renting and they will be able to generate a generous income, whereas selling a house might not earn them enough profits.
So what are you planning to do? Do you want to be a landlord? Yes, significant profits you are going to earn, but before you make this decision, go through the downsides as well. As appealing as being a landlord may sound right now, it is not easy and you will have to face many issues. Make sure you have the ability to deal with them and only then think about renting your property. You can always hire a property management company to take care of your properties from A-Zing!
