Owning a rental property can be a win-win proposition

by | May 13, 2019 | Real Estate

The robust real estate market here in Austin is great for those who own property, particularly if they got in a while ago and bought low. Nevertheless, the competitive market should not prevent others from buying a rental property because it is still often an excellent investment.

Cash flow from rents

Competitive markets mean higher rents, but rents at any rate bring in cash. Those who need cash flow can get it from rentals. According to financial analysts, rental property outperforms the average dividends that a similar-sized stock portfolio provides. The income is also more consistent due to rental contracts, which enables owners to leverage that money into loans for more real estate investments.

Property appreciates in value

The other part of the equation is a property’s appreciation. This is a recurring theme here in the Austin market, which has seen prices go up 7% in the last year. While it is not some flashy tech stock, this kind of appreciation will continue over the time of ownership or the length of the mortgage. Obviously, there are taxes, upkeep, improvements, and expenses, but much of this also can maintain or increase the value of the investment.

Inflation benefits

Inflation is not a bad word when it comes to real estate. Inflation drives real estate prices up, which benefits property owners. This rise in value ensures less exposure to inflation owners see in other areas.

Attorneys help protect assets and owners

The services of a knowledgeable and experienced real estate attorney here in Austin can be a tremendous asset. They can provide binding contracts that avoid unnecessary exposure to owners of rental property and new buyers. They also understand the nuances of the local market and can help determine good investments from bad ones.