You’ve heard it before: real estate is an excellent vehicle for building wealth and financial independence.
When you own rental real estate in Idaho Falls, you have the potential to earn some pretty impressive returns over the long term, and this can help you plan for retirement, save for your child’s college tuition, or build generational wealth for your entire family.
Idaho Falls is an excellent market, both for cash flow and appreciation. Your rental value is going to continue rising and your property will appreciate quickly. There are also tax benefits to renting out homes and of course the advantage of having a tenant pay down your mortgage debt.
All of these things help you achieve financial independence. The key is to invest wisely and to surround yourself with experts who can help you make good decisions and avoid expensive mistakes.
Choosing Profitable Idaho Falls Investment Properties
To be successful as a real estate investor, you need to understand two important things:
- It’s going to take time to earn some real money.
- You can only build financial independence when you choose the right investments.
Some rental properties will cash flow right away, but for most, it will take some time. Be patient. If you’ve invested in a good property, you started earning money as soon as you closed the deal.
Invest in rental homes that will attract stable tenants and higher rents. Think like a tenant when you’re choosing your rental properties and always make sure you know what you’ll be able to earn in rent and what the expenses are likely to be.
Evaluate Your Tolerance for Risk
As with any investment that provides good returns, there are risks when you invest in Idaho Falls real estate. Traditionally, people have believed the higher the risk, the higher the return. But this isn’t always true. If your goal is to build long-term wealth, we recommend a low-risk strategy that reflects an understanding of the market.
For example, a rental property that’s priced well below market will likely get your attention. But, it probably needs a lot of work. Instead of rushing to buy that property, take a look at other options. A fixer upper is one way to invest, but if you want to build financial independence, it might not be your best route to wealth. You’ll have to invest a lot of resources before you can get that property ready for the rental market. Not only are you spending money, you’re also spending time. The vacancy will be longer, and you’re not making any money on an unoccupied home.
Think about risk when you’re choosing a property type. Single-family homes generally attract long-term tenants but they also carry more risk than multi-family properties. Why? Because if you do have a vacancy, you aren’t getting any rent at all on a single-family home. But, if you’re renting out a duplex or a four-unit building, one vacancy doesn’t completely cut off your cash flow. You still have rent coming in from other sources.
Prepare to Invest Time and Money
Many investors describe real estate as a way to earn passive income. That’s true and it’s not true. There’s really nothing passive about owning, leasing, managing, and maintaining a rental home.
If you’re managing on your own, you’re going to need a lot of time to devote to your properties and your tenants. You’re also going to need resources like a good lease agreement, highly qualified maintenance vendors who are licensed and insured, legal experts if you have to evict, and an understanding of the local rental market and how it impacts rental value, marketing, tenant retention, and lease renewals. You’ll need to understand security deposit laws and the difference between a pet and a service animal.
Most investors earn more money and waste less time when they hire a professional Idaho Falls property management company. Property managers have consistent systems in place and years of expertise.
Risk is always mitigated with a good property manager.
Would you like to talk more about how to earn money with rental real estate? We’d be happy to share what we know. Contact us at Jacob Grant Property Management.