By Teo Zhenjie
January 24 2009
With so many other types of investments available to you, why choose rental property investing? Find out about the powerful advantages that you can enjoy as a rental property investor right now.
Rental Property Prices Tend to be Slower Moving and Less Volatile
It's a long established fact that property tends to be a less risky asset when compared to other types of investments such as stocks or currency.
While currency prices tend to fluctuate at lightning pace and share values can change as much as 5% in a single day, rental property values generally take months to rise and fall.
This will also mean that you will need to spend a lot less time and energy monitoring rental property prices. While currency speculators and margin traders have to spend hours daily plastered to their trading screens, investing in rental property will require a lot less time and attention.
When property values do fall, the extent which the prices drop will also be smaller. This is because as a rental property investor, you share the real estate market with a large pool of home owners. Even if there is a sudden steep fall in price, home owners are highly unlikely to sell off their property and that will cushion the price drop of your rental property.
Owning a Rental Property Allows You to Obtain a Second Loan Easier
Unlike most other types of investments, your rental property is well recognised by banks and lenders as an asset. This is true especially if you have been paying your mortgage payments for some time and have built up some equity in your rental property.
That is very helpful if you will ever need to get your hands on another mortgage loan for your next rental property. You can even use it as a collateral to obtain a business loan in case you run into cash flow problems.
Rental Property Investing Helps You Build up Your Credit Score
The mortgage loans for your rental property will be included as part of your credit history. By paying off the monthly mortgages of your rental property on time, you are effectively improving your credit scores.
So why is it so important for an investor like you to have an excellent credit score? A good credit score is extremely helpful if you need to borrow money for any reason. This can include taking a loan to buy another rental property, a new car or even paying for your home appliances by instalments.
With an outstanding credit score, you will be able to enjoy lower interest rates for your loans as you are regarded as a low risk borrower in the eyes of lenders. You can also save yourself a lot of time and energy when applying for your loan because lenders will most likely require less paperwork and financial checks.
Teo Zhenjie has been showing landlords how to manage their tenants and rental property effectively on Propertydo ( http://www.propertydo.com/ ). Visit his website today for step-by-step real estate guides, free resources and forms. Click here for more important tips on rental property investing: http://www.propertydo.com/buying-rental-property.html.
The author has permitted the reprinting and redistribution of this article.