Are you considering a real estate investment to diversify your portfolio? Then you should consider investing in rural real estate. Suppose you have the right real estate agent, then a rural property can prove to be a beneficial investment for you.
You’d be surprised to know that the rural property transactions rose by 15% in recent times. With the demand for rural properties rising, it’s a good time to invest in them. You can rent or sell them and earn a significant profit margin.
Further, when you are into rural real estate investment, you can develop your property better to increase the value of your property. You’ll also find that competition is lesser compared to residential real estate.
Read this article to know the pros and cons of investing in rural property and diversifying your portfolio.
Benefits of Rural Property Investment
In today’s era, investing in a rural property can prove highly beneficial to you. While it is challenging, the benefits outweigh the challenges:
Rural Property is Less Expensive
It is a great idea to invest in rural properties as their prices are lesser than urban properties. Generally, rural properties are on the outskirts of the city. So, they are more affordable.
You can also rest assured that the value of these properties will rise in the coming years. This is due to low-interest rates and high commodity prices.
There is More Scope for Development
In a rural property, you have more freedom to develop it as you see fit. The regulations are less stringent in rural areas when compared to urban areas. Moreover, you will be able to brand and market your property efficiently in rural areas due to the low population.
You can add a barn or fence and expand your property regularly. This will spruce it up so that you can sell it for a tidy profit or rent it out at higher rates.
Lesser Property Taxes
The property taxes on rural properties are lower compared to urban properties.
Essentially you would pay the land tax as an investor. This is because it is not your primary residence. You won’t pay taxes if you convert the property to a farm.
Further, you can be charged as low as 0.25% of the income you earn, depending on the value of your property.
Not much Competition
In rural areas, the number of real estate investors is far lesser than in urban areas. So, you’ll have less competition to deal with. This means you can earn better returns and increase your revenue.
Your Turnover Rate Will Be Less
Another advantage of rural property investment is that the turnover rate will be lower. People in rural areas don’t tend to move much. So, you’ll be guaranteed tenants and labour for years together.
The Downside of Rural Property Investment
There are definite risks in investing in rural property. They are as follows:
- Low population means lesser facilities in and around the area
- Renting or selling the property can take time
- The demand for housing in rural areas is lower than in urban areas
- The support could be much lesser than you expect
- You’ll need to be careful of the town you choose and ensure it’s not dependent on a single industry to prosper.
Rural property investment is increasing in demand due to the low-interest rates, relatively lower prices of the property, and lenient regulations. Moreover, the development scope in rural real estate is much more than in urban real estate.
You’ll also find that the property taxes and turnover rates are much lower, making your property valuable for selling or renting.
You only need to bear in mind that industry support might be less, and it can take time for any sale or rent to go through due to the low population.
Suppose you are knowledgeable and get a good real estate manager, then you can invest in rural property successfully and make money out of it.
So, think wisely and invest wisely in the future.