5 Benefits of Buying a Rental Property
Did you know that over 10 million people — or about 7% of the US population — make money from rental properties?
Are you interested in joining them? The good news is that now is a terrific time to invest in property and manage a rental property.
Before we talk about how to buy a rental property, let’s first discuss why you should consider buying a rental property. Here are five compelling benefits of owning rental property.
1. Generate Passive Income
Becoming a landlord is one of the easiest ways to generate passive income. It’s also an ideal way to diversify your portfolio so all of your proverbial eggs aren’t in one basket.
The right rental property can provide a steady source of monthly income for a minimal amount of effort. Of course, you’ll need to do your due diligence to determine the profit potential of any property before you purchase it.
You’ll also need to make sure you get responsible tenants who will care for the property and (most importantly) pay their rent on time.
2. Great Tax Benefits
Would you like to qualify for some tax deductions? With a rental property, you may be able to enjoy deductions and write-offs for:
- Mortgage interest payments
- Property depreciation
- Repairs, upgrades, and improvements
- Insurance premiums
- Home office expenses
You may also be able to defer capital gains by using a 1031 exchange, which is another terrific avenue to grow your wealth.
3. Freedom & Flexibility
What if there’s an economic downturn in the future? What if you want to sell your property but the market is less than ideal? Or what if your living circumstances change and you need to move back into your rental property?
One of the many benefits of owning rental property is that it’s easier to ride out the different storms that come your way. You can always find tenants, especially during times when the cost of buying a home is higher than the cost of renting.
4. Long-Term Retirement Income
Although there is some amount of upkeep required for all types of rental property, it’s not nearly the same effort that your typical day job requires. In fact, many landlords can retire and live comfortably on their rental income.
The monthly rent price should always cover the mortgage payment while still leaving some profit after expenses. And you can always access more of the property’s value by refinancing or selling in the future.
5. Ward Off Inflation
Real estate is a wise investment because as prices rise, so will the value of your asset. You can always raise the rental price to match trends in your local area as well as the national market.
The rise in rent means that you’ll be able to pocket more money, which is necessary anyway as inflation makes all goods more costly (i.e., repair work and new appliances).
Thinking of Buying a Rental Property?
As we’ve discussed, buying a rental property can be a terrific investment. It’s also an important first step on the path to passive income and a more secure financial future.
Of course, wanting to invest in property and actually knowing how to buy a rental property are two different things. How can you ensure you find the best property to buy?
eFind Agent is here to help. Click here to get in touch and we’ll gladly advise you on the many types of rental property.
