If the extreme market highs and lows of this country have taught us anything, it’s that we should pick sound investments and be prepared to ride them out for the long haul. The old adage says that real estate is a sound investment, but have you explored the concept for more than just your personal home? As real estate agents (and many of their clients!) know, investing in rental properties adds a robust element to any investment portfolio.
It’s much easier to get a loan for real estate than other types of investment (such as gold).
ROI: Return on Investment.
Because your tenants are paying your interest payments on the rental mortgage, you put in less of your own money and get the financial benefits.
Diversification of Assets and High Appreciation.
Property gains value over time (as long as you keep it up.) By putting your money into different rentals, you are diversifying your real estate investments. By getting a rental in the first place, you are diversifying your investment portfolio. It’s good to branch out!
There is a whole list of items eligible for tax deduction when you become a landlord: mortgage interest, repairs to the property, keeping a home office, your rental’s insurance, depreciation. These tax benefits go a long way toward mitigating the costs associated with owning and operating a rental, which means more money in your pocket.
Inflation Safety Net.
Raising rents can help you keep up with inflation.
Real estate investment is an excellent retirement income. As long as people need a place to live, your property will help you finance a comfortable retirement.
Control Over Your Investment.
Although keeping your rental long-term gives the best financial gains, you still have control over when to sell.
Being a landlord sets you up for what’s called a passive income stream: the property accrues value even while your tenant pays the mortgage interest. But this is not a “set it and forget it” deal; absentee landlords open themselves up to a slew of losses, such as extensive property damage by tenants who think they’ll never face consequences and even lawsuits from tenants if their repair and maintenance requests aren’t heeded. Face time with tenants is the best way to avoid these unpleasant events. Still, most landlords agree that a flurry of maintenance and repair activity a few weekends out of the year is worth the effort.
Investing in rentals is the kind of personal business that lets you set the tone. Want to help lower income families out? You have the executive power to lower your rates to match those needs. Want to upgrade your property and get more income out of it? You can choose all the details of your renovation (or just do it yourself, and save thousands of dollars!) and set the rent to reflect the higher quality of your property. It’s really up to you.
Want to learn more about properties available in East Tennessee, and start your own rental investment? Please check out darlenereeves-kline.com.