There are numerous benefits and drawbacks of investing in Pensacola rental properties. Owning a rental property can be a great investment when done right, but you need to consider the downsides as well. When investing in such properties, the goal is to put money to work today and wait for it to grow into more money down the road.
That being said, let us delve into what you can expect by investing in Pensacola rental properties:
1. Income From Tenants
The greatest advantage of owning rental properties is that the tenants will give you a direct income stream. Those monthly checks go straight your business account and offset any monthly expenses.
2. Income From the Growth of Property Value
Since you are the property owner, you also stand to gain from an increase in the value of the asset over time as housing demand increases in the neighborhood.
This, however, is going to be a variable aspect, as it heavily depends on the location of your rental property. In some regions, the value can increase substantially over a period of a few years, while in others the value remains constant. Also, this growth, at minimum, holds place with inflation and so, if your rental property is in an above average region, you might be able to beat inflation.
3. Sweat Equity
Maintaining and upgrading the property is ideally capable of adding value to it. Things like renovations, adding new sidings and basic landscaping to the yard tend to add value to property without investing a lot of money.
This not only enables you to charge more rent but ideally increases the value of the rental property should you decide to sell it down the road.
1. Tenant Risk
Tenants can never guarantee to pay their rent. Sure, you may get a tenant who pays their rent on time for years, but even this is never a guarantee. Some renters will not pay on a regular basis and others will fail to pay. You may find yourself out for months without rent payments and even have to spend a great deal of time dealing with the non-payment as well as eviction.
Ideally, there is the risk of not having a tenant in the first place, which means you will experience periods where the rental property does not generate any income.
2. Active Involvement
One of the most taxing tasks of owning a rental property is active involvement. Even in situations that seem to not require your presence, you still need to devote some notable time into the property. Ultimately, it will call for repair and you will have to check on it. Ideally, you’ll have to interact with some tenants and handle some form of paperwork.
One of the best ways to mitigate these downsides is by hiring a Pensacola rental properties management firm like Main Street Properties Property Management. These are experts when it comes to marketing your property to ensure it has tenants all the time. They also know how to deal with stubborn tenants and will handle repairs, maintenance and any other property issue. At the end of the day, you have mitigated all downsides and can enjoy your investment as you live your life.