No matter when you started investing in Dallas rental properties, you can always learn how to gain more through your investments — that is the key to long-term success. According to recent data, individual real estate investors own almost 75% of all rental properties in the U.S. And, with home values on the rise in markets nationwide (more than 19% since 2020!), buying real estate is both a popular and a potentially profitable way to build wealth.
It’s easy to believe the lie that investing in rental properties will easily generate good money. You have to consider all that these investments come with — risk, reward, etc. But, with proper knowledge and skills obtained through research, it’s possible for you to make money in rental real estate quickly!
Quick but Risky
Yes, the most profitable approaches to real estate are the ones that require a certain period of time. But, there are still ways you can earn a few dollars here and there with real estate. House flipping is one of them. Still, it has its pros and cons. For instance, house flipping can turn a profit on a yearly basis.
The process of locating, buying, renovating, and then re-selling just one property might go on for a very long period of time. There are a lot of things that could go wrong in that amount of time, like repairs or a sudden downturn in the market. To create a steady income stream, you will have to keep your eye out for investment properties and several renovation projects at a time. Be warned: this will be quite stressful, and it will most likely eat up a lot of your time.
Profitable (Maybe) and Volatile
Another option to grow your income through investing in real estate is to buy property as a vacation or short-term rental. Some investors like the idea of charging far more than long-term rental rates for a property, especially if it is near popular vacation areas or destination spots. The disadvantage of these rentals is that the owners are completely dependent on a volatile market. Something like events being canceled to a decline in tourism could make your property not as profitable as before.
Short-term and vacation rentals are great! But, if you want a steady income from them, you would need several tenants. Be ready, though; you will have loads of tenants to screen in the screening process. Something you also need to consider is wear and tear, which is bound to happen because of the people going in and out of the property every week. Of course, this means maintenance and repair. These costs will add up, and they will generate a loss, especially if competition is high and hotels are cheaper, or if you can’t rent your property.
Profitable and Stable
On the contrary, the buy-and-hold approach to real estate can be just as profitable as these riskier methods, but minus more of the stress. There’s a reason why many investors have preferred long-term rentals. Long-term rentals like single-family rental homes require less daily attention. Tenants in these rentals are most likely to stay long-term. Given the increase in the number of renters these past few years, it’s most likely going to stay that way for some time. What does this imply? Well, you won’t have to work hard for the marketing and tenant screening all too much!
What is more, tenants in long-term rentals tend to take better care of the property and can be relied on to help with regular maintenance tasks. Unfortunately, that’s not the case for vacation or short-term rentals. With long-term rental properties, rental income is far more regular and steady, and over time, property appreciation can make owning long-term rentals one of the best ways to build real wealth.
If making money through investing in rental real estate is your thing, then you’re in the right place. We can make that happen for you. Our Dallas property managers work with investors like you to help find, assess, and manage quality single-family rental properties. Contact us online to learn more!
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