While buying a home, fixing it up and then flipping it can lead to good profits, there are also some great benefits of being a landlord. Flipping a home might give you a great chunk of change after the sale, but being a landlord who rents a home means longterm income.
Daren Blomquist of Realty Trac said that an investor can earn 15 percent back from a flipped home- but the downside is that it only happens once. However, he said, an investor who buys a home and turns it into a rental can expect recurring profits, something in the range of 6 percent to 9 percent annually. Especially in today’s housing market where there is no shortage of demand for homes, there will be no shortage of tenants.
“With buying and renting, you’re getting the best of both worlds,” Blomquist said. “You’re getting returns coming in every year, plus you get the long-term [home value] appreciation. It’s like a stock with dividends.”
In Palm Beach, Broward and Miami-Dade counties, 31 percent of single-family homes, townhomes and condominiums are owned by people who don’t live there. An article in the Sun Sentinal recently talked to Phil Schaal, who owns three rental homes about what he thinks the benefits of being a landlord have been. They also discussed challenges he faces as a landlord. He had to learn to balance the amount of money he put into making the homes better with how much money he would be making from renting them.
“It’s not all gravy,” Levinrad said. “There is some work in it. But there’s also a substantial reward in cash flow, if you buy the homes right.”
In a flourishing housing market, investors who decided to be landlords really will see a lot of benefits. If you are interested in finding a property not to live in or flip, but to rent out, check out the properties available at RE/MAX Paradise today.