Top 5 Benefits of a Rental Property Investment
If you have considered investing in real estate then rental property investment must have gotten your attention. It is one of the most preferred real estate investment methods worldwide. Actually right now the rental market is booming as millennials prefer to rent rather than own a home. Homeownership has also become very expensive because the prices for buying a home have increased significantly with income remaining the same. This also leaves renting as the main option most people have. Here are the top benefits you will get from rental property investment.
Passive income– this might be the biggest benefit for you. With a rental income, you will get recurring income every month without having to do much to get it. A rental property lasts long and as long as it is where you are sure to have your rental income coming in. Before engaging in the rental property income you should do proper research to ensure that the operational costs and the mortgage do not exceed the monthly rental income. Further, rental income is not taxed the same way business is taxed. With a rental income, you tax breaks that help you save more. Make sure you get all the plumbing checked by Mr. Swirl or else you might have some serious issues.
Value appreciation– with a rental property investment you are able to wait for a long time for the value of the property to appreciate if you want to make a sale. As you rent out the property you make money and offset the mortgage. As the loan amortization happens, your equity increases and eventually your property becomes worth a lot of money since the income coming from it increases. You are not in a hurry to sell the property at a low price because you are also benefiting from the rental income.
You can use the home– if your rental investment is home, you always have the option to move back in and settle in it when you want. If you have a vacation home you can always use it as your retirement home later on in life.
You can wait to sell at the right time– if you have an investment property in Florida that you want to sell but you feel that the market is not right yet for you to make the profit you want, renting it out gives you the flexibility to wait until the market is right so you can sell your property for the prices you wanted or better even.
Security– if you have a second home that is not inhabited, then it is not secure from vandalism. Small maintenance problems also escalate to become bigger issues causing damage to your house. A beat-up house will have a lower value. When you rent out the house, it stays in good conditions and maintenance is done regularly. This maintains your property in good conditions.