6 Benefits Of Buying Rental Property
If you’re thinking of purchasing rental property, you should know that there are some serious benefits to process. You’ll have to be smart about the tenants that you choose to avoid problems, but otherwise, it can be a wise investment.
RENTAL INCOME
Of course, the biggest advantage to rental property is the rental income itself every month. The rental income that is coming in each month can go towards the home loan with any extras going into your pocket. It might not be a huge amount in your pocket each month, but it’ll go a long way towards paying down the loan on the property.
LOAN PAYMENT
With a tenant paying down the loan on the property, you’re banking money for the future. With a house loan of $150,000, your tenant might be paying $10,000 of that each year. When the loan is paid, you have a home that you can sell, which puts that $150,000 into your pocket. It’s a great way to save for retirement.
TAX ADVANTAGES
Money you make for your rental property is subjected to less taxes than if you earned money as a self-employed individual. There are numerous benefits that impact the cash flow from the property as well as tax advantages for depreciation itself.
DIVERSIFYING ASSETS
When you are saving for the future, investing in rental property makes sense. It’s not an asset that could be liquidated easily, but properties will often increase in price throughout the years. You’ll be able to reap the benefits of that housing price hike later when you sell.
BETTER OVERSIGHT
Investing with companies, you’re at the mercy of someone else. Investing in real estate means that most of your success is in your hands. You can increase rents by making improvements that will attract better tenants. You can sell if the property prices are in a huge upswing and buy a cheaper property. The possibilities will depend on you.
INFLATION PROTECTION
If you think about the cost of items like bread and milk 20 years ago, you’ll realize that inflation is a huge problem, but not when it comes to rental properties. If you buy now, your property will benefit from inflation. You’ll be able to sell that property for much more than you paid for it.
Rental properties do have many benefits that make them a good investment for those thinking about the future. However, it’s important to make sure you keep up with maintenance and repairs so you don’t spend all of your money fixing something that could have been avoided. A Absolute Plumbing & Heating can help with common repairs and installations you may need for your rental property.
Thank you for reading. I hope you found this information useful.
Jeff Pittman, Realtor in Ladera Ranch – Orange County, California