What are the benefits of owning rental properties?
One of the most profitable ventures for an investor is rental properties investing. Over the years, more and more investors have shown interest in real estate due to the benefits associated with real estate investing. Although people have been aware of the profitability of owning rental properties, there are still others who are not aware of the benefits of owning rental properties.
Here are some benefits of owning rental properties.
#1. Monetary Benefits
The benefit that is directly measured in terms of cost and returns of the property is through monetary benefits. The main interest is the amount of money that can be earned from owning a rental property or a turnkey rental property.
There are three basic monetary benefits.
This is the amount of cash coming in and out of the rental property business. This is the money left after taxes, debt service, and operating expenses.
This is described as the nominal increase in the value of the property. Thus, when the value of the rental property has increased, it is said to have been appreciated.
Unlike assets such as boats or cars, real estate properties have the tendency to appreciate. This means, over time the properties have increased their value.
- Financial Leverage
This benefit can be received through the borrowed money or loan. The loaned amount usually costs less than the return earned of its use. Thus, the investor will have moreover larger investments.
#2. Psychological Benefit
The pride of ownership is derived from owning a rental property. It has no subjective value, and this varies from person to person.
#3. Tax Benefits
Owning rental properties has a variety of perks when the time of taxation comes. Landlords can substantially reduce their tax bills if they keep up their receipts and have documentation to support their deductions.
Investing in real estate is one of the ways to diversify your portfolio. In this way, the investor has limited exposure to only one type of investment. As they say, you cannot put all your eggs in just one basket. Thus, diversifying investments is one of the ways to limit the risk.
Real estate investing is all about educating yourself and taking a risk.
Your Home 901 is a real estate investing company based in Memphis, Tn. If you would like to know more, call us at 901 308 2815 or simply visit our website www.yourhome901.com