8 Benefits Of Owning A Rental Property
As the economy continues to struggle and unemployment rates remain at historic highs, many Americans are considering better alternatives for their future. Rental houses offer more than just a place to live, however. They offer many benefits for you and your family including tax breaks, extra cash flow each month, stability during bad economic times, and no long-term commitment. Whether you’re considering buying a home or renting out your current one while still living in it, these 8 benefits of owning a rental property might convince you to break into real estate.
- Tax breaks
If you own a home and live in it, you’re probably looking forward to tax season. You might get to take a deduction for your mortgage interest or property taxes paid, which can save a lot of money. However, if you rent out your home while living somewhere else, you can also take advantage of tax breaks. The IRS allows rental property owners to deduct expenses like repairs, maintenance, and depreciation against their annual income. The idea is that those expenses are necessary for the upkeep of the rental property like Rentola.
- Extra cash flow each month
People who rent out their homes might not think of it as a passive income gain, but many rental property owners are able to keep a large portion of the money they collect in rent each month. They can use this money to pay bills or invest elsewhere such as buying more real estate and maximising their income without working more than they already do.
- Stable living situation
When you live in your own home, you have a lot of freedom to do as you please. But it can be very stressful to deal with landlords and other problems, like having your rent raised each year or dealing with pests that infest your home. Renting out your home alleviates all of these worries as a landlord is responsible for taking care of the home and paying you to rent on time each month.
- Stability during bad times
Many economic experts believe that the housing market has been stagnant and headed for a downturn in one form or another. If this is true, it’s going to be even more difficult for your home’s value to increase as it usually takes a couple of years before a home becomes worth more than the amount you paid for it. In contrast, renting out your home while you live elsewhere will mean that as long as you have renters in your home you can get regular income coming in each month.
- No long-term commitment
If you decide that living in an area doesn’t work out for you or you simply want to move, renting out your home means you can simply stop paying your renters and find a new home in another area. You don’t have to worry about breaking your lease or dealing with people who are upset at the last minute, which can be a huge bonus if you end up deciding to rent out your property for a short time period.
- Ability to buy a nicer home
Homeownership isn’t just about owning something. In many cases, it’s about the quality of life one can have in their own home. Rental properties might not be in the nicest area or the best parts of town, but with an eye for quality and a bit of good research, you can find rental properties that are much nicer than what you would otherwise be able to afford without a high down payment on your first home.
- Ability to pay off your other debt
If you’re already carrying a lot of high-interest credit card debt, a mortgage is probably not what you should be looking at. It’s better to ride out the storm in an area you can afford rather than losing your home and falling into more debt. With rental property, however, it’s possible to keep your home after renting it out. You might even see the value of your home increase once the housing market starts to recover.
- Personal satisfaction
Owning a home is an achievement. It’s the biggest purchase most people will make in their lifetime, and if you want to continue collecting rent each month it can serve as another source of income. If you’re not a fan of living in your home, renting out your house allows you to go back and forth between spending more time with your family and working on other projects or business ideas.
Final Thoughts:
If you want to rent out your home, you will get a better price for it than if you were living in it. Rental properties are hard to get and therefore command a higher rate. If you don’t have the capital necessary to buy, selling your home while still living in it can be a good way of financing what would normally require several thousand dollars. At the same time, being able to make some extra cash each month can also be very beneficial during hard economic times.
