Investing in rental property across South Florida makes a lot of sense. You’re close to the Atlantic Ocean and there are countless things to see and do. Many people want to move to the area but can’t get approved for a mortgage. This then means that people explore rental properties as a way of saying that they live in West Palm Beach. Becoming an investor in rental property is a sound investment and there are many reasons why.
You Bring in a Second Income
When you buy property, you get to rent it out and generate a second income to what you already do. This is because you’re choosing to collect rent on the property as opposed to living in it on your own.
As for what the income is, it will depend heavily on how much you paid for the property and what the average rent is for the area.
Throughout South Florida, the rental properties vary dramatically in price. Some of the smaller homes could rent for $700 a month while some of the beachfront condos could rent for upwards of $1500 a month.
If you buy a property and are paying a mortgage, it will be best to have the rent higher than the mortgage to ensure you’re making a profit every month.
South Florida Real Estate is Booming
South Florida has always been a popular place to call home because of the year-round sunshine as well as the accessibility to some beautiful beaches.
A decade ago, when real estate prices fell, South Florida wasn’t hit as dramatically as many other places because there has always been the demand in the area. Even foreign investors choose to invest in this area because of the location. And in real estate, it’s all about location, location, location.
The cost of homes throughout South Florida is still on the rise with at least a one percent increase across the board regardless of the home type. The newer condominiums on the water are increasing at an even faster rate.
This means that there is no “bad” time to buy. The cost of homes is always increasing so the sooner you get into it, the better. If you’re waiting for prices to drop before you make the decision to invest in a rental property, you will be waiting a while.
If you don’t live in South Florida but you plan to retire in a few years and then move down here, buying a rental property is a great investment. You get in on a lower sale price now and then you stop renting it out once you’re ready to move in and be the full-time residents.
Homes Appreciate in Value
Generally, homes appreciate in value. Look at the cost of homes in the 1980s to what their value is now. In 30 or 40 years, homes have doubled, tripled, and in some instances, increased at even more impressive rates because of location and the various additions that have been made.
When you invest in a rental property, you can choose to rent it for a decade or longer before you sell it. This means you get to collect rent on it and then turn around and make a profit on it later on.
With the home appreciation factor, it’s nearly impossible not to make a profit. The question is simply how long you want to hold onto your investment.
The Investment is More Stable than Stocks
Many people invest in stocks because it’s the form of investment they’re most familiar with. However, there are two types of stock investment methods: safe and risky.
If you go for a safe investment, you might only make half a percent profit each year, and if you’re lucky, the stocks will pay dividends.
If you go for risky, there is the possibility of the company failing and you losing your entire investment.
With rental properties, you’re never going to lose your entire investment. Plus, when you collect rent monthly, it’s a lot like being paid dividends monthly – which is something stocks simply don’t do.
There are Various Ways to Protect Your Investment
Whenever you invest money in something, you want to do whatever you can in order to protect your investment. With a rental property, you can add protection with home insurance. This ensures that if something happens, such as a fire or a major storm, will be able to get the repairs handled without it being your full financial responsibility.
Additionally, you can work with a property management company in West Palm Beach. This provides property managers that will look out for your property when you cannot. This means that you don’t even need to live in South Florida in order to invest within the real estate market.
Once you decide you want to invest in property, call us at Keyrenter South Florida today. We offer property managers in West Palm Beach who can help to protect your investment throughout the year.