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Billy OBrien, REALTOR®, Calif.
Century 21 Award, Calif.
562-726-4183
DRE 01952648
hello@iambillyobrien.realtor
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  • THE POWER OF THE BRAND
  • ABOUT US
    • ABOUT BILLY
    • CONTACT BILLY
    • CERTIFICATIONS
    • OUR COMPANY
    • OUR BLOG
  • SUCCESS STORIES
  • WHAT’S MY HOME WORTH?
  • BUY WITH CONFIDENCE
  • GET YOUR LOCAL MARKET DATA REPORT
  • SCHEDULE A BUYER OR SELLER CONSULTATION
  • SCHEDULE A HOME TOUR
  • HOMES FOR SALE
    • MORE ABOUT THE 18 HISTORIC DISTRICTS
    • LONG BEACH HISTORIC HOMES
    • ◊ BELMONT HEIGHTS ◊ EST 7 MAY 2002
    • ◊ BLUFF HEIGHTS ◊ EST 13 JULY 2004
    • ◊ BLUFF PARK ◊ EST 29 JULY 1982
    • ◊ BRENNER PLACE ◊ EST 1 JAN 1994
    • ◊ CALIFORNIA HEIGHTS ◊ EST 29 AUG 2000
    • ◊ CARROLL PARK ◊ EST 24 JULY 1990
    • ◊ CRAFTSMAN VILLAGE ◊ EST 27 OCT 1992
    • ◊ DRAKE PARK / WILLMORE CITY ◊ EST 28 APR 1998
    • ◊ ELIOT LANE ◊ EST 9 SEP 2003
    • ◊ ROSE PARK SOUTH ◊ EST 7 AUG 2001
    • ◊ SUNRISE BOULEVARD ◊ EST 20 DEC 1990
    • ◊ WILTON STREET ◊ EST 1 AUG 1995
    • ◊ WRIGLEY ◊ EST 12 DEC 1989
    • LONG BEACH HISTORIC DISTRICT VIDEOS
    • CLIFF MAY HOMES
    • LEISURE WORLD SEAL BEACH
    • POMONA, CALIFORNIA HISTORIC DISTRICTS
    • HISTORIC HOME TOURS & RESTORATION VIDEOS
    • ◊ LINDEN AVENUE ◊ EST 5 APRIL 1994
    • ◊ LOWENA DRIVE ◊ EST 11 FEB 1992
    • ◊ NEHYAM NEIGHBORHOOD ◊ EST ?15 OCT 2019?
    • ◊ MINERVA PARK PLACE ◊ EST 7 NOV 1989
    • ◊ ROSE PARK ◊ EST 9 SEP 1997
  • OLD HOMES RESOURCE GUIDE
    • ANTIQUE METAL REFINISHING
    • APPLIANCES
    • ARCHITECTS
    • ARTWORK
    • BLOGS
    • CLOCKS
    • CONSERVATORIES
    • COPPER WARE
    • ELECTRICAL
    • FABRICS AND TEXTILES
    • FIREPLACE TOOLS
    • FURNITURE
    • FURNITURE REFINISHING
    • GARAGE DOORS
    • GATES
    • GENERAL CONTRACTOR
    • GLASS
    • HARDWOOD FLOORING
    • HISTORIC HOME RESTORATION
    • HISTORIC PAINT COLORS
    • INTERIOR DESIGN
    • KITCHEN CABINETRY
    • LANDSCAPING
    • LOCKSMITH
    • NATIVE PLANTS
    • LIGHTING & HARDWARE-PERIOD & REPRODUCTION
    • SALVAGE
    • STYLE
    • TILE ◊ REPRODUCTION, VINTAGE, SALVAGE, COLLECTIONS, REPAIRS, HANDMADE, BRAND NAME
    • WALLPAPER
    • WINDOWS AND DOORS
    • WOODWORKING
    • PAINTER
    • PLASTER/STUCCO
    • PLUMBING
    • POTTERY
    • PRINTING
    • ROOFING
  • PREFFERED LENDER
    • LENDER PAPER WORK 101
    • Mortgage Calculator
  • LONG BEACH UNIFIED SCHOOL DISTRICT
    • SEARCH LONG BEACH UNIFIED SCHOOLS BY ZIP CODE OR HISTORIC DISTRICT
  • COMMUNITY WATCH STARTER KIT
  • LONG BEACH RESTAURANTS, PUBS & BARS
  • LONG BEACH TRAFIC SIGNAL BOX ART
  • CITY OF LONG BEACH HISTORIC LANDMARKS
  • LONG BEACH HISTORY | 1784 to 1988
    • IMPORTANT DATES IN THE HISTORY OF RANCHO LOS CERRITOS
    • VIDEOS ON LONG BEACH HISTORY
  • THE ARTS AND CRAFTS MOVEMENT AROUND THE WORLD
    • ARTS AND CRAFTS MOVEMENT DESIGN
    • ERNEST A BATCHELDER
  • GREENE&GREENE
    • ADELAIDE TICHENOR HOUSE
    • JENNIE A REEVE – TOWNSEND HOUSE
  • GUIDE TO RESIDENTIAL ARCHITECTURAL STYLES
  • TED WELLS
  • PRESERVATION
    • MOST HOMES HAVE A PAST …
    • LEVELS OF HISTORIC DESIGNATION
    • MILLS ACT
    • HISTORICAL SOCIETY OF LONG BEACH
  • LONG BEACH MEDIA
  • STAGING 1,2,3
  • Home
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Buyers

12 Reasons Why Rental Properties Are the Best Investment

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Brandon Turner,09/29/2020

It’s no secret that I love rental properties.

1. You can purchase it using leverage.

Rental properties are great because you can borrow the bank’s or someone else’s money to increase the potential return. This is known as leverage In other words, you don’t need to have 100 percent of a property’s purchase price on hand to be able to buy it. Rental properties allow me to buy large properties for far less cash than I might need to purchase stocks or other investments.

2. It allows the ability to hustle for greater returns.

Not only can I leverage my cash, but I can also leverage my time and abilities to make magic happen in this game—something difficult to do with other investments. In other words, I can hustle. If I want to do the work needed to rehab a property, I can do that. If I want to leverage my networking skills to raise money, I can do that instead. If I want to leverage my knowledge and time to find better deals that provide an even greater return, I can do that. Rental property investing gives me the ability to hustle for my future.

3. You can manage the investment directly.

I’ll fully admit I’m a bit of a control freak, and that drives me toward rental properties in a powerful way. With a rental property, I am directly responsible for the outcome of my investment. It is up to me to analyze a property before I buy it; it’s up to me to ensure the property is in goodcondition to rent; it’s up to me to ensure the property is running at peak performance. I don’t have to depend on some board of directors in New York City for my life’s direction. I can manage my investments directly and personally.

BRRRR-strategy-deal

4. People always need a place to live.

The real estate market will go up and down, but the beauty of rental properties is that demand will never end. People always need a place to live, so unlike the latest tech trend or in your brother's start-up, real estate is an investment that will last. Furthermore, because increasing student loans are making qualifying for a mortgage more difficult and our culture increasingly values mobility, the demand for rental properties will only grow over time.

5. It’s works for millions of people before me.

Perhaps one of the greatest benefits to rental property investing is the proof of concept handed down by millions of successful investors before us. Since the dawn of human civilization, landlords have built wealth by owning and leasing out residential property.Today is no different. According to a joint survey produced by BiggerPockets and Memphis Invest in 2012, “one out of eight, or 28.1 million Americans, either consider themselves to be residential real estate investors or own residential Investment properties today.”

6. It’s (fairly) stable and predictable.

Yes, events such as the market collapse in 2007 do happen, but rental property owners who were investing for long-term gains did not sufferlike those who were trying to be "fancy" (or as my good friend and fellow landlord Jordan says, "punk drunk on greed"). Furthermore, I would argue that the 2007 real estate crash was predictable for those who were paying attention—because one of the defining characteristics of the real estate market is the boom-and-bust cycle that never goes away. Once an investor learns to identify this cycle, the old adage of “buy low, sell high” becomes much easier to achieve.

7. It offers incredible variety.

Rental properties also offer an incredible amount of variety within the asset class. I can invest in single-family houses, small multifamily properties, large multifamily apartments, office buildings, high end, low end, Section 8, transient, and any of a number of other options. Then, within each of those classes, I can find larger properties; smaller properties; ones that are newer, older, taller, shorter, ugly, beautiful, and so on. The possibilities are endless.

8. It’s simple and straightforward.

Although I’ll never claim that working with rental properties is easy, I do maintain that investing in rental property is fairly simple and straight forward.

Sure, it involves more than just buying a piece of property and placing renters in it, but the strategies for success are not overly difficult to learn or master. To help, a tremendous amount has been written on the topic by those who have mastered it. Books, podcasts, videos, blogs, forums, networking groups, mentorships, and more can be found to help you learn nearly everything you will ever need to know.

Here’s Why In addition, knowledgeable people are available to help. Several months ago, I ran into a situation I didn’t know how to handle (a smoking tenant accidentally lit part of the outside of her house on fire yet claimed she hadn’t). I reached out to other investors on the BiggerPockets Forums and received some excellent advice on how to proceed—and it didn’t cost me a thing.

 

tax-changes

9. I can buy below market value.

I was raised by a “garage sale mom” who taught me the value of haggling for the best deal. As a result, one of my favorite reasons for investing in rental properties is my ability to find properties that I can buy below market value.

In other words, I can shop for a great deal! Finding properties that are worth $100,000 that I can buy for $80,000 truly excites me and is an integral part of how I’ve been able to build wealth so quickly over the past eight years.

10. Insider trading is legal.

In the Wall Street world, there is a concept known as “insider trading,” which is when an investor makes a profit on a stock because he or she had access to some secret bit of information that helped him or her buy or sell at the right time.

This practice is not just discouraged in the stock market, it is also illegal and can even land you in jail (just ask Martha Stewart).

However, as a rental property investor, I can leverage any secret knowledge I can find to benefit my investments. If I know that a new ight rail is moving into a neighborhood, I can jump in and swoop up properties before word gets out.

If I hear that a major industry is leaving an area, I can get out of that area before the market declines. And unlike in the stock market, this is 100 percent legal and encouraged in the rental property realm.

11. There are multiple ways to profit.

One of the greatest benefits of rental property investing, especially compared with other real estate niches and strategies, is the opportunity to capitalize on all four of real estate’s major profit sources:

  • Cash flow
  • Appreciation
  • The loan pay down
  • The tax benefits

12. You don’t have to be present to make money.

Finally, I love the idea that I can make money without physically needing to be present. That’s called a “job,” and I want to avoid that. Understand that real estate is not generally a 100 percent passive activity, but over time, the systems you create can help you outsource most of the land-lording process. The dollars will roll in whether you get out of bed in the morning or not

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