Is Owning A Rental Property A Good Way To Make Money?
Spoiler warning: this post will hurt a lot of high expectations…..
Most single family residential rental income is not substantial and nowhere close to being enough to live off of.
That income won’t let you take long vacations sipping coconuts soaking up the sun on a tropical beach, all while posting the pictures on Facebook and Instagram to make your friends and family jealous. Sorry.
It is not passive income. It requires a lot of upkeep and work for it to be profitable and stay profitable.
Rental properties are still a very good investment.
But the mindset should not be on income stream. It should be on wealth building. Most investors who buy single family rentals do it for long-term wealth. Most of (the smart ones) know to never rely on the rent income to live.
You’ll be needing that reserve money down the line for vacancies (where you have to pay the mortgage when there’s no rent to cover it) and major repairs (think new roofs, A/C, foundational work in the worst case, etc).
Rental income really is just a way to cover your holding costs while you wait for the property to appreciate and build up enough equity to make a healthy profit when it comes time to resell the property. It is unwise and not advisable to rely on it for income.