Rental Property is one of the oldest sources of income.
Surfs in medieval times worked land that was owned by a landlord. It was essentially a type of rental agreement that became more refined as time went on. The property itself was not the source of the landlord's income, it was the "rent" paid (by the surf and later the tenant farmer,) in money or goods that was the source of the landlord's income.
The Astors made their fortune in rental property, mostly in NYC.
Real Estate Investments fall into two categories: Buying and Selling and Buying and Renting. Even if you hold property for a long period of time waiting for the value to increase, you will probably rent it (if possible) to earn short-term gains on your investment. Profit and income often come back to rental income.
How Most People Get Started
People may have a starter home and as they purchase a larger home, they have accumulated enough wealth that they can keep the first home and rent it when they move to their new home. Or they may be moving due to a job transfer, a marriage or they may inherit a home.
Later they may invest in homes for rent, waiting for the value to increase before they resell them. This is not an efficient income generator since there are expenses associated with the rental property such as taxes, insurance, HOV costs and there is a limit to the rental price of the unit. Often it takes years for the rent to rise enough for the property to cover all the costs and provide an income. If there is a vacancy it is 100% loss of income for the month or until the next renter moves in.
Apartments are a better source of income since there are multiple tenants and, for example, if one tenant moves out of a unit even in a small 4-unit apartment building, it is only a 25% loss of income per month. And it is easier to have a waiting list because there is a faster turn over. It is also easier to contract for maintenance,
Air BnB Changed Everything
Now you can make rental income from your own home, your converted garage, or even a Mother-in-Law Suite! If your property happens to have one. You can rent out a room in your house if you want strangers living with you.
Or you can build a living unit on your property. Then you deal with contractors, building inspectors, permits... the list goes on. And it's easily a half year or more that you have expenses and no income. Figure IF you can build a living unit for $160 per sq ft, most locals require a minimum of 1200 ft for a living unit. That's $192,000 to build.
With a Harmony Creek Tiny Home, designed especially for the Short Term Rental Market, you can have the unit, financed, installed, and earning money in about two months!!! And for as little as $87,000! And you can have a positive income from the time you start renting.
IT'S AN OBVIOUS CHOICE!
