While many real estate investors are crazy for the concept of flipping homes, there is an equally strong benefit to be found with investing in rental properties. Even in the worst of economic times, folks will still need places to live. If those folks don’t own their homes, then they are renting them. And don’t discount the great values to be had with two family homes or multi-unit buildings. When you begin to develop your own real estate investing strategies you should be giving serious consideration to rental properties. Here’s why:
Positive Cash Flow
A rental property can generate positive cash flow. Those are the three magic words every investor wants to hear! With a single rental property, you could have your mortgage payment made along with a few hundred dollars extra. That’s every month. Now, multiple that by a multi-unit building and those couple of hundred dollars will add up very quickly. Once your rental property is up and running, those monthly checks will be coming your way without much effort on your part.
Getting into the rental business also provides you with a certain level of security in troubled economic times. Not only will you have a certain guarantee of income, but you’ll also have a level of equity that you can tap into. Isn’t that what financial independence is supposed to be all about?
Tax Breaks
Around tax time, you’ll find owning rental properties to be another benefit. Current tax codes allow for property owners to assess an annual tax deduction for depreciation on their properties. If you end up selling the property, you will have to pay capital gains tax, but this doesn’t always have to be paid all at once. Entering into real estate investing means you’ll be entering into an entirely new level of tax filing. This is where you’ll defiantly need the advice of an experience investment coach or tax accountant.
Building Equity
With the concept of real estate investing comes the idea of appreciation. This is when the value of a property goes up. If you’re generating income from a rental property, then that appreciation can also reflect in potential increase rents. Additionally, you’ll be able to take more equity out of a property like that when you can prove its value as a rental.
Pride of Ownership
Finally, there is also a sense of pride that you can feel when you can proclaim owning multiple properties. You could be providing any number of families or couples with the opportunity to live in safe, comfortable surroundings. Beyond the cash flow, you’ll feel a great sense of accomplishment when you can provide these rental opportunities. It’s also a great way to expand your investments. Once you’ve become accustomed to life as a landlord, adding additional buildings will be a snap.
