In 2015, there were about 48.5 million rental properties in the United States.
So many people are starting to own rental properties because they’ve realized how many benefits there are to doing so.
Are you thinking about investing in rental properties? Here are 8 reasons why owning rental properties is a good thing.
1. Another Source of Income
Many people invest in rental properties as another source of income. This is probably one of the biggest benefits because you have a direct stream of money while you are still able to work at another job.
The monthly rental checks can go straight into your bank account and can help cover some of the costs of running the rental while still letting you pocket some of the money.
If you rent out a property for only $1,000 a month, that’s $12,000 extra you make for the year.
However, before you go out and buy a rental property, you should figure out what your gross income will be after all the fees, maintenance, and upkeep costs will be.
2. Sweat Equity
When you have a rental property, you will most likely have sweat equity as well. This will add value to your property and make it worth more than it was when you purchased it.
Even small things like repainting your home, refurbishing the inside, and doing some basic landscaping can help your rental property look even better. This will add value to your home, and you will also be able to charge more rent for it as well.
Once you’ve finished renting it out and you decide to sell it in the future, you should be able to sell it for more than you bought it for, making a profit off of it.
If you love home improvement projects and are always looking for ways to make things better, getting a rental property may be a good idea for you.
You will also get a full say in what improvements you decide to do and how it all can look at the end of the day.
3. More Security
Having a rental property also gives you some more security.
Sometimes people have to temporarily move for work, and they don’t want to leave their family home. They could buy a rental property to live in for a little while and then end up renting it out after they go back home.
Having people rent your house will help it stay updated and also protect it from burglaries or vandalism. If you choose the right renters, you can rest assured that there are people taking care of it.
It also gives you financial security. If something happens to your main source of income, you will know that you have a little bit of cushion to fall back on in.
4. You Get to Make All the Decisions
When you own your own rental property, you can to make all the rules. You are in charge of your own investments, and you’re essentially your own boss.
You can choose which properties you want to invest in, which tenants to rent to, how much improvement to put into the house, and how much you can charge.
If you hate a general 9 to 5 with a boss or manager, looking into becoming a rental property owner may be a great way to make a living.
5. Tax Deductions
When you own a rental property, you also get a lot of tax deductions from the government.
If you own property, you can claim it on your tax return and get a lot of benefits. For example, the cash flow that your property brings in isn’t taxed!
6. Real Estate Appreciation
In addition to making improvements to your house and improving the value, the property will also appreciate naturally when you sell it.
The appreciation will depend on what the housing market is like at the time, so you will need to keep an eye on that if you’re thinking about selling it at some point.
You should do a little bit of research before you buy a property to make sure that the value will appreciate rather than depreciate.
7. Investment Diversification
It’s always good to make investments to help diversify your income. However, it’s also important to have a lot of different investments so that you don’t put your eggs all in one basket.
You may already invest in the stock market, but renting a property help diversify your portfolio. It will also help give you a little bit more protection against risk in case one of the markets crashes.
8. You Can Sell When It’s Convenient For You
You may not want to keep your rental property for forever, but the best part about owning one is that you can sell it when it’s convenient for you.
If the market isn’t the best, you can hold onto it until it gets a little bit better. You don’t have to sell it for a loss but rather you can still gather rent checks until the market gets better.
This way you are in more control of how much money you make off a property.
Learn More About Owning Rental Properties
Owning rental properties can be a daunting task, but there are so many good reasons to do it.
It can be a lot of work, but it’s a solid investment to make.
To learn how to make the most of your investment property, make sure you check out some of our other blog posts!