Making Money With Rental Properties

Making Money With Rental Properties
06-23-08

Although the residential real estate market has hit the skids, it is not as gloomy as it appears. The market may be down, but it is not out. In fact, it will never be out as long as people need places to live. The most important thing is to not panic. The next is to start thinking long-term.

One of the best ways to make money in a down real estate market is through rental properties. In fact, there has never been a better time than today to purchase a rental property. Housing prices are lower than ever and so are mortgage rates. If you buy property now, you can take advantage of both. You can then hold onto the property for several years while renting it to tenants who will, essentially, pay your mortgage for you. Then when the real estate market moves towards a seller's market, which it eventually will, you will likely be able to sell the property for much more than what you paid for it and end up with a nice profit.

Before you buy, be sure to do your homework on the property and know the market in the area you're looking at. How much are other homes in the area renting for? If you rent your property for the same amount of money, will it be enough to cover your mortgage payment, taxes, and insurance? Is this an area that is likely to experience an increase in property values over the next few years as the market begins to turn around?

Make sure that you also understand the tenant laws in your state. Tenant laws usually favor the tenant, so be sure to screen your applicants carefully. And, of course, you will need to obtain a good security deposit, especially if you are renting out a single family home.

It is possible to make money in a down real estate market. You just have to be smart, be patient, and be willing to make the most of these long-term investment opportunities while you wait for the short-term opportunities to make their way back onto the scene.

Mark E. Moebius
Miljonair Homes
Custom home builder St. Louis
3451 St. Albans Rd.
St. Albans, MO 63073
636.300.9000