Evaluating the Drawbacks of Rental Property Investments

Although rental property investments can create a lot of financial security and stability, no investment strategy is perfect. Let’s take a look at some cons of buying rentals.

Deferred Income and Gradual Profit Accumulation

Renting does not bring in money immediately. The income that you’ll be making will be spread over the entire time you own the property, which means the profit is not received in one lump sum as flipping would provide.

Traditional rental income real estate requires large amounts of capital. Like flipping, purchasing rental properties does involve some costs (i.e. down payment brokerage fee, land transfer tax, legal fees, etc.).

Rental properties are not as liquid as flipping which means they cannot be sold as quickly and easily if a sudden need arises.

Rentals take time and money to manage. Investors must choose to handle maintenance, repairs, showings, rentals, and emergencies on their own, or find a reputable property management company to handle the job.

Affordable Real Estate Investment through Fractional Ownership

Today, there are many options for investors to buy into real estate without the huge upfront costs. At BuyProperly, we use a fractional ownership model that allows people to buy real estate for as little as $2500 to start. With this type of investment, you don’t have to dedicate time to finding tenants, managing the property, and taking care of all the operational details.

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Read about What is rental income real estate investing?