Investing in rental property: the pros and cons

If you want to start a business and to invest in something, rental homes are maybe a good business plan. But, before investing in rental property you must know all the facts. Both, good and bad too. We can help you with researching. First of all, you should have a good business plan a team you can trust. The idea is good, but it requires a lot of researching. So, let’s start.

The pros of investing in rental property

Let’s start with good things and pros of investing in rental property. These are the most important advantages and benefits when you want to invest in some kind of rental property.

researching and Investing in rental property
Details are important when starting any business. So, we have some pros and cons in this business.

Incomes from your renters and from property value growth

Of course, the biggest pro is earning money. Tenants will pay you every month and it is the most important thing. If you rent your home for $1,000 per month, for one year you will earn $12,000. That is a lot of money for your business.

Also, sometimes there are situations when a property value is increasing. When a property value is growing, it means you will have more money. That is why you must do a researching about the neighborhood where you want to buy a home. If prices are getting lower and lower, do not buy that property. A good plan is a key to a successful business.

Sweat Equity

You can add additional value to your property bu repairing it. There are many simple projects that will increase home value. And your incomes will be much bigger with these changes. Spend a little time and you will know what do you need to change or upgrade. With little improvements, you can earn a lot.

Mortgage interest

The average mortgage interest is 4.34% for a 30-year fixed rate. It is relatively low. Mortgage rates are typically higher for investment properties, but if you have tenants, that outcome is not a big deal. Also, not to mention, the low fixed-rate that is secured by properties is the best hedge against inflation. In the end, when you calculate your incomes and compare them with taxes, fees, and insurance, your incomes will be much higher, for sure.

The cons of investing in rental property

There are some cons to investing in rental property too. To have a clear picture, you should know all the facts before you start any business. Also, pay attention to what city you will choose. You should pick the best west or east coast cities for families or millennials. Cities that are growing fast.

Researching properties.
Only with researching, you will know is it your idea good or bad? Everything depends on you because you should choose the best neighborhood for investing in properties.

Risk with tenants

Probably, you will not have tenants all the time. There will be months will no tenants at all. And if you do have them, sometimes tenants will late with rent or they will be rude. It is hard to find good tenants, but it is not impossible. NO one can guarantee you that they are o.k. but pay attention to details when you meet them for the first time. The best option for you is to have good tenants for years and years.

Taxes and fees

It does not matter if you have tenants in the house or any other property, you must pay your taxes, fees, and insurance. Those bills are not too big when you have incomes from your renters, but when you do not have them, it is a problem for your budget. Keep in mind that insurance on a rental property is about 20-25% higher than usual insurance.

You must be involved in everything

Many people think that this business does not require a lot of work and obligations. But, it is so wrong. You will lose time with repairing, upgrading, searching for tenants, doing paperwork, etc. Of course, you can always hire some company to do it for you, but your incomes will be lower in that case. If you want to earn as much as you can, then you should do all the work.

Renting apartments in Baltimore, Maryland

If you want to start a business in Baltimore, you can. But, if you are not living there, it is better to move there and manage your business from there. For your moving, you should pick the best and reliable company, such as Allstate Moving and Storage Maryland. They have a lot of experience in moving and if you need a storage unit (many businessmen do), they will help you, for sure.

Here are some facts about starting a rental business in Baltimore.

  • First of all, many millennials live here and families too, in this city of Maryland.
  • The population is 620,000 but it is growing.
  • There are a lot of bars, restaurants, parks, etc. and that is a good sign too.
  • 54% of residents are renting a home here and 46% are owning.
  • A median home value in Baltimore is about $154,000 and the average rent is $1,010. This is a fact you must know before investing in rental property 

Many investors have storage units to put all their items inside. For example, furniture, paint for walls, documents, etc. Luckily for you, affordable storage facilities in the Baltimore area are easy to find. 

Calculating the costs for a new business.
If you want to start your business in Baltimore and to invest in properties there, then you should know all the facts and calculate everything.


Now, when you know all the advantages and disadvantages of investing in rental property, you can make the right decision. We hope that we helped you with researching and by giving you all the cons and pros of this business. So, good luck whatever you choose.