Many wealthy people have emerged through investing in the real estate sector. But just because this is the case does not mean that every investment is a walk in the park. Although there are various lucrative means in real estate through which one can make money, you have to carefully consider all the facets of the investment before making a decision.
Investing in rental property is one of the many ways of making money in real estate. It is an active investment platform and requires a lot of patience and financial savvy. This article would let you in on all you need to know about this profitable investment.
Find out how to make good investment decisions here
What is a Rental Property in Real Estate?
Rental property in real estate is simply investing in a property for the purpose of renting it out either for residential or commercial purposes. Both residential and commercial rentals have their pros and cons, as such you have to weigh in all of them before deciding which one to go into.
There are different types of rental properties that exist in real estate and getting proper information helps you decide on which to begin with. Like the saying goes, “the hardest part is getting started”, but once you do, you can figure more out along the way.
Read more on Commercial Real Estate here
Types of Rental Properties
Single Family Units
This consists of one unit. It is usually easier to manage and the cost of doing so is not as high as the other types of rental properties.
It is also usually the best place to start out when trying to invest in rental property. The initial cost of investment is low and you can expand to other types as time goes on.
Multifamily Rental Properties
Just as its name implies, this is a property that consists of more than one unit. It could be a small multifamily rental of about two to four units while a large multifamily rental consists of five or more rental units.
Your return on investment is determinant on the size of the units you choose to invest in. You also have to take into consideration the cost of maintenance, repairs and any other financial obligations required when setting money aside to invest in this type of rental property.
Commercial Real Estate
In commercial real estate, rentals are used for commercial purposes such as office spaces, restaurants, stores or any other business purposes. This is also a very good avenue for making profit.
This type of rental property could cost more in terms of investment capital but it has also been known to generate high returns. You could also hire the services of a property manager to ensure your property is well taken care of.
Read more on Duties of a Property Manager.
What You Should Know About Buying Rental Property
When buying rental property there are certain things to note so that you do not make costly mistakes or end up losing money. Some of them are;
- Create a budget and go with what you can afford so that you do not go bankrupt while trying to invest in rental property.
- Get acquainted with the laws guiding the town within which you want to make investment. You could also hire the services of a real estate lawyer.
- Work with a tried and trusted real estate agent. Understand that you cannot do it all on your own. An experienced and professional realtor will make it easy for you to get tenants for your rentals in good time.
- Consider important factors when choosing a property to invest in such as location, state of property, existing paperwork and so on. You do not want to invest so much in a property only to discover it’s an area people are not willing to live in.
See more on why you need a real estate lawyer here
Rental Property is a profitable real estate investment platform you can take advantage of to improve your investment portfolio. You have to make sure that whatever property you are investing had a high property value in order to recover your profit faster.
MKH has a number of properties across Lagos and Ibadan with which you can start your rental property investment. These properties are strategically located and designed with premium features that make it very easy to rent out. You can contact us by clicking here for more information.