How To Use Rental Income To Build Long-Term Wealth
Are you looking for a reliable, stable way to grow your retirement funds? Read here to learn how to use rental income to build long-term wealth.
The key to financial success and building wealth is creating long-term, passive income. We’re talking about the kind of wealth built from passively managing assets and watching your investments grow over time.
There is one particular type of investment that is extremely lucrative and a sustainable way to build retirement funds and develop long-lasting relationships as well.
This would be property rental income.
In this article, we’ll go over how renting out property is a tremendous way to build wealth and how to get started.
Why Rental Income is a Great Way to Build Wealth
Seattle real estate is unbelievably hot right now. If you already have property in the area, or you’re in the market for purchasing a residence, then now is a fantastic time to get in the game.
Done right, rental income creates cash flow. More importantly though, it’s one of the best ways to build your asset portfolio.
When some people think about becoming a landlord they worry about potential issues. It’s true. Being a landlord is a big responsibility and you should fully informed. The biggest variable to being financially successful as a landlord is people. Having reliable tenants is one of the most important factors. People who are considerate, pay on time, alert you if certain aspects of the house or apartment are in need of repair or attention, and other qualities are the ideal tenants for any landlord. This is why VerraTerra offers extensive tenant screening for all our property management clients.
Once you have tenants you trust, your job is to maintain the property and pay the mortgage (if you have one). The nice thing about rents is most tenants already anticipate rental increases over time. This helps you maintain a positive cash flow even as expenses might increase.
Rental utopia is when the house or apartment complex is completely paid off, and you still have tenants who pay rent on time. You keep 100% of the income minus maintenance and expenses. Plus, your property is growing in value over time, which creates long term assets for you.
While the housing market does indeed fluctuate, there is always a demand for rental properties, especially in Western Washington where the economy is booming.
Bear in mind, it’s good to consider diversification in any sound financial and wealth planning. Mutual funds, stocks, bonds, businesses, and other investments will help your savings be well diversified.
How to Create Wealth with Rental Income Now
2018 is a wonderful time to rent out in the Seattle area.
A Census Bureau report showed that Snohomish County had 10,500 new people move into the county limits in 2016, doubling what we saw in 2015. King County experienced similar growth; in 2017, their real estate market finished as one of the priciest in history. (And 2018 is climbing even higher.)
Home values grew between 11% and 28% throughout the county last year, and the number hasn’t stopped increasing. Now is the time to grab a piece of real estate in the area. Then, when demand gets even higher, rent it out to vetted people who have a good history of paying on time and being considerate tenants.
Rental income is a great opportunity to build longstanding, profitable wealth.
If you have real estate in the Seattle area already and want help managing your properties, check out Verra Terra’s property management services. While most property managers charge a percentage of the rent, VerraTerra offers fixed-fee property management services. This helps lower your overall expenses and increase your return on investment.
If you are considering options to purchase potential rentals in the greater Seattle area, we can help with that too.