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In the United States, there are 48.5 million property rentals.
If you’re interested in owning one of these rental properties, you may be wondering if it’s a good idea.
There are actually a lot of benefits of owning rental property, and we’ll break them down here!
Here are the benefits
1. Enjoying a Profit
One reason many people get into owning rental property is that you can enjoy some extra income. When you rent your place out, try and find good tenants that will pay their rent on time at the beginning of the month. That way you’ll have a steady flow of income.
You can enjoy many benefits of owning rental properties, but this will depend heavily on making sure that the tenants you choose are responsible and have the income to pay you.
If you are going to be having a lot of rental properties or don’t have the time to manage all of this and screen for tenants, you may want to consider hiring a property management agency.
2. Tax Benefits
In addition to having additional income each month, you’ll also get tax benefits for it.
When you go to file your taxes, you can deduct expenses that are associated with this rental property. This includes improvements to your house, depreciation costs, or just any other regular expenses associated with the rental.
Yes, this includes your insurance payments, cost of maintenance, and even the interest from your mortgage.
There is also a tax benefit for just being a landlord. In 2017, the Tax Cuts and Jobs Act was proposed which offered many incentives for people to become lawyers. There are some legal details that make you eligible to get a tax cut for this, so make sure you read all of the fine print and little details before you buy a rental property.
3. Plan for Retirement
While having a 401k, stocks, and a savings account lined up for retirement is smart, you still want some more income to rely on. This is where renting places out comes in handy.
Many people often forget to save for retirement until it’s too late. Having extra income from renting a property out is a great way to put money away into your savings. If you’re already retired, it’s also a great way to have income without having to do much work.
Renting out a property gives you so much more flexibility than just buying your own home.
For example, if you’re traveling for work and end up somewhere only temporarily, you may not want to invest in buying a house. However, if you find the right house, you could buy it and then rent it out once you move.
It can be difficult to sell the house again, especially when you’re trying to move and leave somewhere else. Instead of leaving the place vacant, you can rent it out when you’re not using it and then still have a place to come back to.
Plus, it’s better to have someone living in the house and paying for it because they will make sure that the home is taken care of while you’re away. And they’ll be paying you for it!
5. Be Your Own Boss
For the people who could never work with a boss, owning a rental property is the perfect way to make your own rules.
The only person you’ll have to answer to is your tenants, and even then, you still get to make the rules and the lease. Even if you hire a property management company, you’ll still be able to be in charge.
6. Expanding Your Investment Portfolio
When you’re investing money into different things, it’s important to make sure that you invest in all kinds of different things. That way if one of your plans doesn’t work out as well, you still have something to back you up.
In addition to investing in the stock market, you should also try finding a rental property to help diversify your portfolio. Doing this will help minimize some of your risks when it comes to investing.
7. Property Will Appreciate
Unlike buying cars, most properties will appreciate in value, making them a popular investment.
When you buy a house, also set aside some of your budget for renovations or upgrades that you want to make to the house. Once you start doing this, you’ll be able to charge more rent or even sell the house for more money than it was worth.
8. More Stable Market
For people who were around for the 2008 housing market crash, you may feel hesitant to get into real estate. However, renting homes out is a much more stable market than trying to sell one.
Whenever there is another market crash, you probably won’t want to sell your property and take a loss on it, However, there will always be people who are looking to rent your property. That way you can rent it out until the selling market is stable.
9. Help Pay Your Mortgage
Lastly, renting out your property to tenants can help you pay your mortgage. If you can pay off your mortgage faster, you won’t have to pay as much interest in the long run.
When you hold a property for a long time by renting it out to different tenants, they’ll be paying down your mortgage and reducing some of the interest you’ll have to pay in the long run.
Discover More of the Benefits of Owning Rental Property
These are only a few of the benefits of owning rental property, but there are so many more to enjoy!
It can be difficult trying to find a house to buy and then rent, but we have you covered! Our website offers so many more tips and tricks to know about rental properties.
If you enjoyed this article, make sure that you explore our website to find more just like this one.