Typically, home sales jump up 3-5% each year, but 2021 has seen an even bigger growth. Because the prices of houses are going up, most people are looking for rentals instead.
The truth is, you might have more trouble selling your home than you would renting it out. If you've thought about turning your home into a rental, this guide is for you.
Read on to learn five benefits of owning a rental property.
1. Creates Profit
Owning a rental property can create long-term profits if you can consistently rent out your home. However, the rent price should be more than the mortgage and other expenses.
If you run into shortfalls and need to make up monthly expenses, you can use annualized tax benefits, refinancing options, and real estate appreciation.
2. Inflation Protection
When you invest in rental property, you are making a safe bet. During points of high inflation, you can actually make money off of your home.
The home will be valued higher when inflation is high which creates a cash flow for you. You can use this cash flow opportunity to buy rental property in other areas as well.
3. Property Management Options
Knowing how to own rental property is not easy, but a professional can manage the property for you. Being a landlord isn't everyone's dream career.
In the Washington DC area, property management options are affordable and can help you manage a positive cash flow. Your home will always get taken care of for a percentage of the rent.
4. Tax Advantages
When you own real estate, you receive tax advantages if you turn a property into a rental. A law in 2017 placed caps on property tax deductions and mortgage interest, but rental properties can benefit from those expenses.
Rent received income is taxed less than the income you get from your regular day job. You can also take advantage of depreciation deductions and deduct fees you pay for property management companies and more.
5. It's Temporary
Turning your home into a rental property doesn't have to be a forever thing unless you fall in love with the process. You can keep your home to move back into one day or sell it when the market is up.
For example, this option is great for those who have to relocate because of a job. If you plan to move back to your old neighborhood eventually, you won't have to go through the hassle of hunting down a new home to live in.
Is Owning a Rental Property the Best Option for You?
If you are on the fence about selling your home, you don't have to! Instead of making money from a home sale, you can become a rental property owner.
If these benefits seem attractive to you, look into becoming a landlord or having a rental property management company take over. For a small fee, you could be making money on your home in no time.
For more information about owning a rental property and how to get started, contact us today.