If you are looking for a way to make money, buying a rental property may be an effective method to secure your financial future. As a landlord, you can use your property to make money in a variety of ways both today and in the long run. Let's take a look at some of the best reasons to look into purchasing such a property.
You Get Consistent Income Each Month
Typically, a lease runs for an entire year, which means you get a rent check for 12 consecutive months. If you own a property that is used for commercial purposes, you may be able to find a tenant who signs a lease that runs for multiple years. If your tenant decides to prepay, you don't even have to worry about collecting a rent check each month.
The Property Should Appreciate in Value
It is common for a property to appreciate in value, which helps increase the return you earn on your investment. For instance, if you buy the property for $100,000 today, you may be able to sell it 10 years from now for $125,000 or $150,000.
Property Owners Can Benefit From Tax Breaks
If you finance the purchase with a mortgage, the mortgage interest may be partially or fully deductible. Furthermore, you may be able to itemize any of the work that you do to the property and write-off your expenses. Finally, you may be able to depreciate your home for tax purposes, which can save you thousands of dollars per year.
You Can Pass on the Property to Future Generations
By including the property in a will or trust, you can pass it on to future generations who can then benefit from income generated by the property. If you are planning on passing on a rental property, make sure to talk to an attorney, like Fisher & Talwar - Los Angeles attorneys, who understands eminent domain and other real estate issues to make sure the process is handled correctly.
You Can Occupy the Property
Many people will buy a duplex and occupy one side of the home. This enables a homeowner to reduce their mortgage and start saving money to buy subsequent rental properties. It also gives you something to fall back on if you ever want or need to sell your principle residence.
Buying a rental property can give you both financial flexibility and the ability to put yourself on better financial footing. When done correctly, you will earn steady income each month while increasing your return as the property appreciates in value.