Property Management Blog

Three Reasons You Should Consider Investing in a Rental Property

Bob Preston - Wednesday, May 18, 2022
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Research suggests that demand for rental properties has begun to soar. Occupancy rates are higher than ever in 25 years, and average rent has reached record highs. If you're like most people today, you may be wondering if you should buy a rental property. Compared to 2004, the national homeownership percentage has dropped by 9%, and several factors explain this drop. 

Shifting away from owning to renting is borderline self-explanatory. The values of houses have sky-rocketed, and incomes haven't risen at the same pace. Homes are less affordable, but that's not all. Renting offers tenants a certain degree of flexibility. As a result, people can delay important life decisions such as starting a family, buying a house, or marriage. 

In a market like such, landlords are at an advantage. Given the current state of the real estate market, you should consider looking at the benefits. Here are some of the most prominent perks of investing in a rental property.

1. Passive Income

Perhaps one of the most prominent benefits of owning a rental property is earning passive income. This means that you have a recurring source of income that takes relatively little to no effort to maintain. As a result, this can be an attractive option for several people looking to make money on the side. 

It can also act as a retirement safety net for people since they don't have to actively work for this . To ensure that being a landlord is profitable for you in the long run, you must factor in all the expenses you have to incur. Once you have a rough idea of your cash flow, you'll have to assess the numbers at your disposal. Do you think you'll be able to make a consistent income after you've purchased the property? 

If you can, go for it!

2. Security

Some people have to move temporarily for work. In other cases, people inherit homes that they may not want to sell for sentimental reasons. There are several reasons people may have to deal with a vacant property. A vacant home is at higher risk of being broken into and vandalized. Moreover, some maintenance problems may go unnoticed, and they can quickly escalate to become bigger problems, too. 

All in all, it's hard to keep an eye on a home that you're not living in, and that's where tenants can help out. By transitioning this property into a rental home, you are keeping a pulse on all maintenance issues and keeping it secure! This way, you can have peace of mind knowing that a tenant is looking after the property on your behalf. 

3. Inflation Hedge

Another prominent reason to invest in a rental property is that it acts as a hedge. That means it can protect you from inflation. When rents start to increase and the values of homes increase faster than the rate of inflation, a rental property can save you from portfolio devaluation. Here's how it works:

The U.S Bureau of Labor Statistics suggests that the annual change in the Consumer Price Index is 5.3%. Even when prices increase, rents and home prices increase even faster. Research by Zillow suggests that the value of a typical American home increased by 17.7% in the last year (2021).

Rents have increased at the same pace, too. 

But What Should You Look for In a Rental Property?

If we have you convinced, then there are certain factors you should be looking for when you're thinking of investing in a rental property. These features can help your property stand out from the rest. Some of those features are:

1. The Location

The location can often impact the quality of tenants. This directly impacts your revenue, too. Remember, a great tenant will be willing to pay more, or they may also overlook certain downsides if your property is in a good location. 

2. Transportation

Renting a property close to major highways and public transportation is a major plus, too. Most people won't stay at home all day, and they prefer taking easier routes to work. They can also easily access local entertainment options with ease, too.

3. Parking

Off-street parking is a requirement in some areas. Even if it isn't, it's a feature that attracts quality tenants. This feature can be hard to find in urban settings, but you should still consider looking for a property that has a garage or a carport. 


As you may be able to deduce, owning a rental property can have several benefits. Every investment comes with risks, and real estate is no exception. You can mitigate these risks by hiring a San Diego property manager who ensures that your property operates on a profit and that the management bits are always hassle-free. 

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