However before we jump in, let's make something crystal clear: You need to pay for investment properties with 100% cash. Don't even think about entering into debt for a rental property! A 100% down payment takes debt out of the formula, decreases your risk, and sets you up to make more cash a lot quicker. Regardless of the ups and downs of the realty market, most homes increase in value over the long term. In fact, home worths have actually been going up practically continuously every year for almost a decade.2 The elegant investing word for an increase in worth is called appreciation.Also, purchase a low price and ride out any declines in the market till your home has actually valued. Getting income from rentals is probably the more immediate and interesting factor investors decide to acquire a property. Once you've protected tenants, owning and renting home is a fantastic method to make extra income without a great deal of effort. Aside from requiring cash on hand to cover any repair work or upkeep, your part is quite hands off. There's even less for you to do if you employ a home management companybut that will cut into your profits. Bear in mind, though, that handling tenants can be aggravating and lengthy.