Are you currently a landlord, overseeing a piece of property and charging rent to the tenants? If so, you’ve probably learned a couple of lessons about real estate strategy, patience, and payoff- there’s no question about it. While being a landlord can absolutely pay off, it’s a position that operates in the minor leagues- if you’re looking to enter the big leagues, consider becoming a real estate investor.
Real estate investors take more risks and often times get better results and profits than landlords, and while it can be scary at first, real estate investing is one of the best ways you can spend your time and money for the purpose of building wealth. If you’re not sure, here are a couple of reasons why you should consider upgrading from landlord to real estate investor:
Investors deal with less hassle
Being a landlord can be an extremely challenging and frustrating job. Landlords have to go through the processes of marketing the property, screening tenants, collecting rent, making repairs, bookkeeping, and on and on. Investors, meanwhile, exempt themselves from this daily grind by focusing more on the business and profit-making part of the game. Real estate investors need to hire a property management company in order to take care of these tasks, which might seem like a great expense at first, but the advantages that come with hiring a PMC far outweigh the costs.
Investors avoid indigent tenants
If you were to take a survey of all landlords that have been in business for over 5 years, most would say that they’ve had to deal with a tenant who lost the ability to pay their rent. Whether you’re situated in a dwindling economy or not, you’ll more likely than not have to issue a quit notice or use a court injunction to get a tenant to leave, which is a tremendous pain (not to mention an emotionally difficult thing to do). If you’ve made the decision to invest in a property and hire a PMC, however, you won’t have to deal with any of these challenges.
Investors have increased focus
The many responsibilities of a landlord can be extremely frustrating to carry out on a regular basis, and as an investor, you’ll be able to focus on one thing at a time. This can increase your total profit in the long-term as well as the short-term, and will make the whole experience a great deal more enjoyable.
Asset appreciation
Property value appreciation is a beautiful thing. As the net operating income of a property increases, due largely to a reduction in maintenance cost and an increase in rent, you’ll be able to reap larger profits as time goes on. This is one of the many reasons why investing in real estate is such a smart move- you’ll be able to receive a great deal of capital gains while also receiving steady cash flow.
Source: Entrepreneur