With most economies in dire condition today, investing is riskier than before. The rule of thumb is to make an investment that can’t easily be affected by pandemics and other situations that destabilize the economy. When interested in real estate, you should consider investing in rental property. Read on to discover what makes investing in rental property the ideal post-pandemic investment.

Access to passive income

One of the best pandemic-proof ways to financial freedom is to have passive income. This is earning money without having to put in the daily effort. One of the best ways to earn passive income today is to have rental property. You have to put in some effort but it is worth it. If you get good-paying tenants, you will eventually see money in your bank account without any hustle. This passive income is very helpful especially in trying times now where there’s a risk of losing your job or about to retire.

The money from your tenants helps to offset the mortgage for your rental property. Additionally, the income from the property will cover any expenses for managing the rental property. This comes in handy for expenses such as purchasing another property to expand your property portfolio, renovating the property, or diversifying your investment portfolio.

Enjoy immense profits

The goal of making any investment is to enjoy profits. Today, you should consider real estate rental property investing when looking for a viable investment idea. After paying off the mortgage, you will have immense profits to enjoy in form of rental income for many years to come.

Keep in mind that managing rental property comes with some operating expenses. However, you remain with a sizeable amount after deducting the operating expenses. And, the real estate industry is affected to just a small extent in case of a pandemic.

Appreciation in property value

There are other ways to earn from rental property apart from rent payments from tenants. The value of your property will increase over time known as appreciation. Real estate  is less likely to lose value. Your property is most likely to gain value as years go by and the rent collected increases subsequently. By the time you decide to sell your property, you are going to get much more than you invested.

Property appreciation is inspired by various external factors such a national economic performance, growth in population, or developments in the neighborhood. Before investing in property, it pays to understand the possibility of those situations that might make your property value increase happening.  You can get this from projected development trends and historical pricing dates. Understanding these allows selecting the ideal location for your rental.

Leverage your finances

Investing in rental property is a smart move when looking forward to growing the amount you have currently. You can just pay the little you have currently for the property but you get full rights to the income from the property. To get a clear picture, you leverage the little amount of money you have at the moment to get high returns.

Using the property as collateral

Rental property is a tangible asset. So, you can use it as collateral to get a loan from the bank. You can use this to invest in more rental property or diversify your income. Investing in rental property to get collateral is a smart idea to raise quick capital. This comes in handy when you need a sizeable amount of money in a short period to accomplish a huge investment.

Benefiting from tax breaks

Another wonderful benefit of investing in rental property is benefiting from tax breaks and deductions. When computing your income tax, fewer taxes are deducted. This is because you deduct the cost of management, owning, and operating the property. Besides, you claim various tax concessions for maintaining and managing rental property. These include annual loan interest on a mortgaged property with any origination fees considered as tax-deductible costs.

Justification of managing rental property allows deducting the following components:

  • Travel costs
  • Maintenance and repair expenses
  • Management and legal costs
  • Property condition depreciation

Why hire a property manager for your rental property

A lot is involved to efficiently manage a rental property. So, it’s worth hiring a professional property manager. You will have to fork out some money for this service but it saves you a lot of time and headaches. Property managers will handle tenants on your behalf. You will just have to wait as see as money flows on your account every month. Additionally, you won’t have to worry about late-night calls from tenants regarding issues such as a power failure of a broken plumbing pipe. The property management company will handle all these on your behalf.

Bottom line

Making investment decisions in a volatile economy is not a simple matter. Investing in rental property is a pandemic-proof idea that will see you earning big for years to come. It pays more to hire a professional property management team to do manage your rental property on your behalf.