I want to make investment in real estate, but my friend told it’s better to buy and rent the property as it will help me to earn more profit. According to him if I buy property from the intention of reselling it, the flat will be vacant till the time the value of the property increases. Whereas if i rent the property, I will get regularly monthly income from that property. So till the time I resale the property, I am getting rent from that property.
But my concern is, renting property will reduce the value of the property and will not get the expected resale value.
It will definitely depend on how you manage your property. You should choose reliable tenants, who will keep the property in good condition. Then it probably won’t affect the home value so much.
It depends on what rents are in a given area versus home selling prices. Renting is best option You should choose reliable tenants to keep your property in as is condition.
You are on the right road. Leverage is needed to increase the profitability of the deal. I would prefer to buy it with debt instead of renting it because of the control factor. If it is your mortgage you control the end game where if you rent it your landlord is in control.
Short term rentals promise you decent returns - about 5-7% yields. Hiring a management company helps to avoid problems with finding new tenants. Its service costs 20−25% of the total rental revenue but the expenses will be rewarded with higher occupancy rates. The best option seems to be a one-bedroom apartment somewhere in the city center popular with tourists. Apartments in Barcelona appear to be a good option in terms of prices/yields
Your response is awesome, informative and professional… it seems like you really know a lot about the real estate market.
So, I wanted to ask you, and others here, something. What are your predictions when it comes to house prices in 2017? I would like to buy a family house in Canberra region as soon as possible, but prices are a little bit too high for my budget at the moment
What do you think, are house prices going to decrease or increase in a year or so?
It depends. If you’re looking to buy and sell, are you making any improvements or are you just relying on the market to increase the value of the property?
You can make more money rehabbing house after house than you can buying and renting SFH’s.
If your starting off with your first property, with intentions to resell, look into getting a multifamily unit. Renting is on the rise, people are not looking to be tied down with a mortgage so many are opting to rent. If you purchase a duplex, or greater you could live on the property and your renters may your mortgage. So you basically live for free. Do background checks, call references and previous landlords, you don’t want a tenant from hell.
I think it really depends. If you have the time and resources, then renting can make sense. Then other times it just makes sense to get the house then turn around and sell it. Finding something off market is always the key for us.
Your friend is talking correctly about renting. While you will receive monthly income from renting real estate, it is possible that the market price of this property will increase. Yes, it is possible that the price may fall, but while it will decrease you will already compensate for your losses by letting it in for rent. And now look wider, but if you can’t buy real estate in some European city? The price for it there has only increased in the last 10 years. Europe is becoming a fashion!