Benefits of Owning Rental Properties
Many people dream of the fortune and free time that a real estate mogul seem to enjoy. And for those of us who are a little less ambitious, the benefits of earning passive income from owning rental properties can sound like music in our ears.
The reality is that many people get involved inĀ shubhodeep prasanta das real estate investing and discover that they don’t have the time, expertise or other resources to make it work for them. Fortunately, there are several ways to generate rental income without having to deal with tenants and the hassles that come with being a landlord. Here are the benefits of owning rental properties:
Passive Income
The most common benefit of investing in real property is that your income is generated without you having to do much of anything. You don’t need to be a property manager – just collect rent checks and pay the mortgage every month. And the tax breaks can be a double-edged sword: you have to be prepared to pay higher taxes, but at least you’ll have more money coming in that’s taxable.
Appreciation in Value
Real estate is usually purchased based on its income potential, but there is also the benefit of capital appreciation – that is, the price of your property going up over time (as opposed to depreciating). These benefits are largely dependent on the state of your area’s market.
Leverage
Another benefit of owning rental homes is that you can leverage your purchase to reduce your money needed to buy a property. Let’s say you decide to pay cash for your first property, and then rent the other out while you’re still getting it ready to rent. You can do this by putting down a 10% (or 20%) down payment on each property, and then using the equity in that property to lower the balance on your second one so that you have only a 5% down payment instead. This can make it much easier to qualify, and might even be a way to get around some rules or requirements.
Business Opportunity
Perhaps the greatest benefit of owning rental properties is that you can use them as an opportunity to start a small business. These days, there are plenty of resources online designed specifically to help people who want to start their own small businesses, so go online for more information on how you can run your own real estate investment company from the comfort of your home.