In the past year or so, the real estate market boom has made for some interesting shifts in supply and demand. As a result, many potential home purchasers find themselves priced out of the residences they planned to pursue. At the same time, the pandemic has inspired a mindset change for many of us. Increasingly, work-life balance is getting its due once more, and vacations are on the rise. How does all of this converge to impact you? Well, if you own a property that could be rented, it might mean passive income. Because for those with little savings and vacationers alike, renting makes sense. Should you consider renting out your custom home next year? Let’s talk through some of the reasons we think the answer is yes!
#1 Your Custom Home Could Create Passive Income
The overarching and obvious reason you should consider renting your custom home is passive income, of course! In a time when many of us are exploring ways to increase our income while decreasing our working hours, passive income is the answer!
While there are many techniques for generating passive income, property is at the top of our list. Why? Because it holds value like little else and involves much less risk as a result. You could also create passive income through stock investments or selling downloadable content, but both of those things could change in value at the drop of a hat. Real estate never does. While it does fluctuate (the last year has certainly made that clear!), it doesn’t jump up and down the way other passive streams do. Real estate will always maintain a certain threshold of value.
The short of it: Real estate is possibly the safest way to make money in your sleep!
Make money passively, month to month, off of renters, and then eventually you could still sell your property and receive all of the equity.
#2 Home Rental Market is Hot
As we mentioned before, renting is more prevalent than ever. Some 109 million Americans live in rental housing as of this year, according to iProperty Management. The same article notes that “The number of renters increased between 2006 and 2016 by 23 million, compared to the number of homeowners, which increased by less than 700,000 in the same period.
It’s clear to see that renting is here to stay. For many, it may be the future of living for decades to come. As such, you have an opportunity to easily find long-term, reliable, and responsible renters.
#3 Demand Has Inspired More Management Options
For many, the primary hesitation behind the idea of renting out a property is having to act as landlord. Undoubtedly, such a role can be stressful, unpleasant, and complicated. But because of the ongoing growth of rental markets around the country, an entire industry has cropped up around property management companies. Websites like All Property Management, which connects property owners with qualified local managers here in Savannah, can help you find the perfect person to handle all of the gritty details.
You will, of course, have to pay them, but most rates are reasonable enough for you to still make a chunk of change off of the rent you’re being paid.
#4 Renting A House Keeps Property Secure When You’re Not Around
Aside from the financial bonuses, owning multiple properties in different places is fun because it enables you to change your own scenery without constantly feeling displaced and paying steep room or rental prices. There is something rather magical about showing up to your favorite vacation spot and settling into a home that is yours—decorated and furnished just as you prefer.
But of course, when you aren’t staying there, that home sits empty. For many reasons, this is not ideal. First, problems with plumbing, rodents, etc. might go unnoticed for a long time. Second, it poses a security risk. Many thieves have a process for analyzing a home before they attempt to rob it. If they stake it out for long enough, they’ll realize no one is there.
Renting solves both problems! If you purchase a second custom home and rent it during the months you won’t be there, you buy yourself a vacation spot and passive income and peace of mind. Win-win-win!
For these four reasons, we think that you should absolutely consider renting your custom home in 2022. Rentals are needed, and you can have the best of all worlds—long-term investment, vacation property, passive income.
With a separate carriage house that could even be rented while you’re living in the main house, our River Homes here at Upper East River pose the perfect passive income plan. But so too do our other residences. The Hamilton offers lock-and-leave luxury, making it an ideal second home, and any of our other home types would prove an exciting listing for rent during the months you might not spend in Savannah.
Learn more here on how to acquire and establish a rental property.