Investing in multiple rental properties is the ultimate goal for many rental owners. Before purchasing a second property, you may be thinking, “Should I own more than one rental?” We have the pros and cons of investing in multiple rental properties listed here for you to consider before mapping out your next real estate moves! Keep in mind, either option you choose is manageable with a great property management team there to guide you, and take on most of the workload for you.
- More rentals equal more money – This is typically the main motivator behind owning multiple rental properties. The more you own, the more tenants you are able to have, and in time the rentals accumulate more income than a singular property would. And we know, more money in your pocket is always a pro!
- Financial Security – Owning an income property is one of the smartest ways to make an investment. Because rental properties are tangible assets, and continually in high demand, you can have security and relief in choosing one of the lowest risk investment options.
- Passive Income – This is where your dream life and dream career come into play. Multiple rental properties can easily become passive income once you’ve partnered with a reliable property management company. Essentially, the property management team will take care of all of the hassled tasks like collecting payments and making repairs, while you get time to do what you love with more money in your hands.
- More rentals equal more money – That’s right –– though you are making more, owning more than one rental property also means you will have to spend more. More than the price of purchasing the property, owners also have to consider prices of insurance on multiple rentals, repair costs, taxes, and other expenses that accompany owning rental properties.
- Higher costs up front – Although there are higher costs all around in owning more than one property, an important factor to consider is the upfront cost. Typically a 20% downpayment is required on future rental properties, therefore it may take longer for you to save up the amount needed for each mortgage.
- Responsibility – As the landlord for multiple rental properties, your responsibilities will increase drastically as you add more units. Tenant requests, maintenance requirements, and even general upkeep can add up quickly, which is why it’s extremely important to find a property manager that you can trust to take care of these responsibilities!
Before you make the decision to purchase a second rental property, take the time to consider all of the risks and benefits that you may encounter. Thankfully, many of the cons are avoidable by hiring an experienced property management company to take on the day-to-day tasks for you. If you have questions regarding having your properties maintained by a management company, or any other questions regarding a real estate purchase, we’d be more than happy to help! Please reach out to our team at 435-703-9946 or go to www.redrockpropertymanagement.com for assistance.