If you pay close attention to the property market, especially from an investor’s point of view, you will notice a segment gaining a lot of popularity this past couple of years.
That segment is the rental property market.
Due to the rise in tourism and changes happening in the market, rental properties are quickly becoming one of the best investment instruments to use. Capital gain and long-term return are not the only reasons why rental properties are attractive as an investment.
In this article, we are going to discuss six other reasons why rental properties are a solid investment:
Reason #1 – Low Entry Barrier
It is now easier to enter the property market and the rental property market is no exception.
You don’t have to invest 100% of your own money to have a potential rental property generating revenue. A lot of financial institutions only require you to invest 10% of the value of the property via the initial deposit. Some even require you to invest less if you already have a good relationship with the bank.
Thanks to online platforms and holiday rental sites, it is much easier now to connect with the right potential customers and rent properties out on a short-term basis. You keep most of the return and only pay a small fee to the platforms you use (i.e. AirBnB).
Reason #2 – International (Potential) Customers
Want to reach an even wider audience and more potential customers?
The internet is once again your friend.
Potential income streams of rental properties have grown in recent years due to more international travellers exploring the world. All you need is a prime property in a good location, and that brings us to our next reason: more location choices.
Reason #3 – Invest in More International Locations
And there are more prime international locations in which you can invest in luxury rentals!
Portugal or Malta in the Mediterranean and the Caribbean present a lot of opportunities. Other holiday destinations are just as attractive. Asia, especially Southeast Asia, is also a region you want to look into for great capital gains and multiple streams of income.
Now that you have more locations to choose from, it is also easier to find a rental property to invest in.
This means you can find an investment opportunity that suits your budget perfectly.
Reason #4 – Easy Management
If you think managing rental properties in multiple locations is difficult, think again.
Once again, the wealth of resources you can now access in just a couple of clicks makes rental property investments more accessible than ever.
Property management firms will help you handle everything associated with renting the properties out to short-term customers. They will also handle most of the maintenance tasks for you, allowing you to enjoy the income without all the hassle.
Reason #5 – Higher Return on Investment
Aside from the short-term income streams, rental properties also have the potential of producing a high capital gain in the long run.
As an investment, luxury rentals offer a healthy return on investment in general, both in the short run and in the long run.
The combination makes investing in rental properties perfect for those who want to strengthen their portfolios. The property market is not as volatile as the financial market, offering a nice balance between risk and return for even the most inexperienced investors.
Reason #6 – Good Exit Strategy
Last but certainly not least, rental property investments let you benefit from a clear exit strategy: if you think the ROI doesn’t meet your expectations, you choose to liquidate the property and invest in other opportunities just as easily as you can choose to enter the market in the first place.
With these six reasons in mind, it is easy to see why the rental property market is becoming more popular among top investors of today.
Can you see why you too can join the excitement and start earning revenue from your own rental properties in no time?
This article was contributed by Elena who is an experienced investor and writer for shortletsmalta, specializing in luxury rentals and the rental property market. She loves sharing her experience online.