Owning Rental Property and the Benefits

by Jennifer Bland

Landlording and property management can be a great business to get into. There are many benefits to owning and renting out homes. It does not matter if you invest in one home or have many homes to rent out. The more homes, the more benefits, and if you know how to manage the properties and use those for tax advantages, then you will be very successful in investing.

Owning a rental property can be fun and rewarding. For many investors it gives them a sense of power and control over their destiny. For others it is fun and exciting and keeps them occupied. For all it is about the long-term benefits, the profits and sometimes the taxes. In some cases there are ways that you can avoid paying taxes on a rental property that you choose to sell.

A lot of investors like the additional income they receive from tenants, especially if the rental property is paid off and the rent is all profit. If you have a fixed mortgage on the home, then your payment will not change over time with inflation. However, the rental amount will increase with inflation, causing an increase in your profit margin every few years. One tax benefit does not have to pay taxes at all if you sell the home. A 1032 can be filled out when a home is sold that allows the seller not to pay taxes on the capital gains from the sale. The rule here though is that the next home you buy it has to be purchased for more than what you sold the other home for. Basically you have to be upgrading.

Having ownership of rental proprieties come with certain plusses. Although landlording and property management is not for everyone, if you know what you are doing, then it can be rewarding. One of the greatest things is that by owning rental properties you are creating a constant cash flow when they are occupied by paying tenants. You can build a great and profitable asset portfolio of homes and in 10-15 years sell them and cash out, making a large amount of money from the equity.

If you currently own a rental property or are thinking about lanlording and property management, then you can see there are many benefits to it. Most of them are all the same across the board. States do, however, all have their own sets of rules for taxes and may have some incentives of their own, but most of them are the same, too. Finding the best home to invest in and finding good tenants are just a few things that will ensure that all the benefits that can come from owning and renting property are there. Obviously purchasing a home cheaply and being able to rent it out for more than the mortgage is ideal. The key is that the longer you can hang onto the homes, then the bigger the money profits will be for you.

This article was written by...

– who has written 120 posts on InvestInRealEstate101.

I am an Entrepreneur. Mountain Climber. Neil Diamond fanatic. World traveler. MBA grad. An active real estate investor having experience with single family home rentals, mutli-family home rentals, subject-to, flipping and buying foreclosures on the court house steps.

Contact the author

Previous post:

Next post: