The Top Advantages Of Having A Rental Property Of Your Own
If you have extra money and you don’t know whether to save or invest it, you should consider investing. There are so many ways to invest your money but many prefer to invest in real estate. Investing in real estate has so many benefits like tax advantages, stable cash flow, and leverage. Instead of putting money in the bank or spending it on useless items, have a better financial plan. Investing is also smart thinking because it means you’re planning for the future and making good use of your money. If you are new to the world of real estate, then you should start with investing in rental properties. This article will explain to you the advantages of having a rental property of your own.
Investing in a rental property is easy for a beginner. You don’t need to have a degree in business or be a businessman/woman to invest, it can be a source of passive income instead of having a steady job, or you are simply taking advantage of an empty property that you own. It isn’t that complicated but you should still do some research to understand how to market your property and maintain it. The best thing about this is that you don’t have to answer to anyone and you get to be your boss. It is really simple and liberating.
This is the biggest and most important advantage of owning a rental property. It is something you can do to earn some extra cash besides your job, or you can consider it a retirement plan so you can be financially secure in your golden years. You need to have a better understanding of how your cash flows by factoring in all your expenses. This way, you’ll have a better understanding of whether being a landlord is profitable or not.
Remember you aren’t only making money, but you’re spending it as well to maintain the property. If you don’t have the time to maintain the property or you feel like it’s too much work, you can hire a property management company to take care of everything. The folks at Phoenix real estate managers state that having a manager can make things easier, especially if you have difficult tenants- just remember to factor in your expenses before hiring one to make sure you can afford a manager.
Before you start any new project your first thought is usually about the taxes. However, there are many tax benefits to having a rental property, like a tax deduction. As a landlord, you can deduct interest from the existing mortgage, you can also deduct the cost of repairs in the years they were done like if you fixed a door, the cost can be deducted. One of the most important benefits that come in handy is that regardless of an insurance company policy that is associated with the rental property, you can still get deductions from insurance premiums.
There are many occasions when you may find yourself with an empty property, like through inheritance or having to move, but not wanting to sell your house. When you find yourself in any of these situations then it is smart to rent your property because it is unsafe to leave your property empty. You risk vandalism or maintenance issues. Renting your property will protect it, as you will have tenants to look after the place and you will get a steady income out of it instead of it deserting it and not taking advantage of it.
Sell at Any Time
One of the many advantages of having a rental home is that you can sell it whenever you want. You will most likely sell your property at a higher price than when you bought it due to appreciation. However, the market isn’t steady and you might find that selling your property will be more of a loss than again. In this case, you can rent your property out until the market conditions improve and you can sell it. It is a win-win situation since you will be making money by renting it, then by selling it at a better price.
It is never too late to start planning for the future or to start your retirement plan, and there isn’t a better time than the present. Do your research, ask people who have experience in renting property, and have a plan to invest and meet all your financial goals.
JR Dominguez is the technology, finance and music editor for MiLLENNiAL. When he's not writing, you can find him day-trading stocks, playing video games, or composing commercial scores.