Those investing in real estate often choose to invest in rental properties. While one of the goals of owning a rental property is to have a source of passive income, one of the advantages of owning real estate is that regardless of rental income, you still have the asset itself.
Even if a tenant is unable to pay rent, your investment is often still increasing in value due to the appreciation of the property. This is in contrast to other investments, where the asset itself often sees far more volatility. While a temporary lack of rental income may not negatively affect your overall portfolio, those who rely on rental income to pay a mortgage may still struggle. This is one of the reasons why investors should ensure they have the financial flexibility to handle a temporary lack of rental income prior to investing in rental properties.