It doesn’t matter as much if you just started investing in Tampa rental properties; the secret to long-term success is knowing how to profit from your investments. 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 think that investing in rental properties will automatically mean good money. It is, after all, an investment like any other — it comes with variables that have to be taken into consideration. Nonetheless, with access to a wealth of resources, anyone is capable of learning how to make money in rental real estate quickly.
Quick but Risky
Even though many of the more profitable approaches to real estate investing require a length of time, there are some ways you can earn a quick buck in real estate. House flipping is a great way to do just that. It does come, however, with some pros and cons. House flipping, for example, can generate good profit in a year.
The process of locating, buying, renovating, and then re-selling just one property can require a certain number of days, weeks, or years, even! 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, you will have to keep your eye out for investment properties and several renovation projects at a time. 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 negative side of owning these rentals is that you are subjecting yourself to a very volatile market. If tourism declines, this could lead to events being canceled. Things like these could inevitably affect your property and make it unprofitable.
For those rentals that are short-term or vacation, you will need a good number of tenants in order to stabilize your income flow. Tenant screening will be such a long process, though! Wear and tear is something to take seriously, especially when you have many tenants going in and out of the property each week. More in and out means more maintenance and repairs — another set of expenses. This could lead to loss, especially if the competition is high and the hotels are cheaper. This will make renting your property more difficult.
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! The go-to for most real estate investors have almost always been long-term rentals. They have a good reason for their choice. You see, long-term rentals like single-family rental homes offer more freedom in the sense that it doesn’t need too much attention 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 makes marketing and screening of tenants less stressful.
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. With vacation or short-term rentals, that’s simply not the case. 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.
If you are interested in the possibility of making money by investing in rental real estate, you’re in luck. Let us help you. Our Tampa 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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