To determine whether an investment in rental is still a good investment will depend on your personal circumstances.
A Moneyweb reader asked: I recently took a bond for rental property. The property is in good condition and one of the lower-priced rentals in the town. I am worried about the possibility of not having a tenant due to the state of the economy. Is rental property still a good investment? As a certified financial planner at Crue Invest, here are some answers: Investing in residential property as a long-term investment has been popular over the years.
Starting with the investment risk, it is important to understand whether you will be investing in one property or if you will have a portfolio of several rental properties. Should you have various properties that you want to invest in, you can diversify your investment risk across a few properties, which will result in much-reduced investment risk.If your investment in rental property is a major part of your portfolio, it again may point to the investment not being appropriate for you, due to the high risk that an investment in a single rental can pose.
One aspect of rental income is that it remains stable and only typically increases on an annual basis in line with inflation.
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