Thanks to some cable television shows that chronicle regular folks who purchase, renovate, and rent out a property in order to generate extra income, the concept of purchasing an income property is becoming increasingly popular.
This is for good reason; there are many benefits to being a landlord. Check out the top 9 benefits of becoming a property owner.
Property appreciates and builds wealth
Real estate is almost guaranteed to appreciate in value as long as you are willing to hold on to it for a while. On average, real estate prices have risen 5% per year since World War II.
Property values may rise and fall with the economy in the short term, but over the long term, it is a wise and secure investment.
An investment property earns income
If you manage your investment property well by renting to reliable tenants who pay their rent and charging rent that exceeds your monthly expenses, you can gain a steady source of income from your investment property.
Owning an investment property diversifies your income stream
If you were to lose your job due to a layoff or a medical problem that prevents you from working, your investment property provides an alternative source of income and gives you a bit of a financial cushion.
Real estate is a low risk investment
Investing in the stock market can be volatile. Real estate, however, is a safer, lower risk investment that will yield steady returns.
Investing in real estate allows you to leverage your investment
Some kinds of investments require you to have a lot of cash up front. With real estate, though, you can get a lot of property for a little bit of money.
You only need a small down payment to get started. With the money that you earn from that initial investment, you can trade up to a larger properties with a higher return on your investment.
Owning an investment property offers short-term tax advantages
Of course, the income that you earn from your rental units is taxable. Your expenses related to the units, however, are tax-deductible.
You can deduct mortgage interest, insurance, and maintenance costs. Related business costs like accountant and attorney’s fees are tax-deductible, too.
Owning an investment property offers long-term tax advantages, as well
While the value of your property is likely to increase significantly while you own it, you won’t be responsible for paying federal taxes on that increased value until you sell it.
You can continue to work a full-time job
And you can take on an investment property as a part-time commitment.
If you choose one investment property that is not terribly far from where you live or work, you can manage that property while continuing to work at your regular job.
You can make owning an investment property even simpler and less time-consuming by hiring a property manager.
Gives you a sense of professional development and accomplishment
Investing in real estate gives you a sense of professional development and accomplishment. When you take on this new responsibility, you learn a whole new set of skills.
You will learn how to manage finances, deal with people, and handle home repairs. This skill set is certain to enhance your existing career.
If you are interested in learning more about becoming a property owner, get in touch with McMath Realty.
We offer a variety of services to assist you, including investment consulting,property management,rental management,property inspections, and home maintenance.
Contact McMath Realty at https://mcmathrealty.com//contact.php to learn more about how you can invest in real estate to generate income and build wealth today!