Is renting property a good investment? After you work hard or saving some time, you might have money to invest and start to think about property. Even if you don’t have enough money, with good calculation and plan, you can use little money and apply for bank loan to start renting property as your own investment.
Renting property is a current investment trend in line with the increasingly dense population. However, like all investments, buying property has risks. Follow the discussion of the 4 biggest risks in investment profit and loss based on experience.
Why Renting Property as Investment?
First, property investment provides ownership of physical assets. However, it is important to have physical assets in an investment portfolio.
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Because when economic conditions are unstable, the value of physical assets is relatively stable. Asset ownership provides an important diversification in investment.
Second, everyone must understand that property investment offers an increase in value or return in line with the density of the population in big cities and the limited land for development.
Land is not created anymore.
Third, renting property brings in passive income through rental payments.
Properties in strategic locations can usually be rented out to provide additional income.
Rent money can be used to pay bank mortgage loan installments to finance property purchases.
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If the rent is good, you can say that you only have to pay a down payment to own the property because the mortgage installments are paid by the income of the rental property each month.
Fourth, of course, property can be used as a place to live while enjoying the increase in the value of assets over time.
Even though it is not leased, investors can enjoy the capital gain value which can later be realized when the property is sold.
That is a list of the advantages of renting property as investment.
However, with all its advantages, property investment carries several risks. These risks need to be identified so that they can be mitigated to make a profitable property investment.
