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Advantages of Rental Property

Rental property can be a great investment. There are many advantages to owning rental properties. Do you know the advantages to being a landlord?

One big advantage is the monthly income generated from a rental. This income should be able to cover the mortgage, taxes, insurance, maintenance, and leave some extra income. This creates a stream of monthly income for other expenses or future rental use.

The fact that your tenants rent can pay off the mortgage on the house or multiplex you purchase is one core benefit of renting. This allows you to build equity without using your own money. This equity can be used to finance future rental purchases so that you can build a rental property portfolio.

Rental property is an asset. You are building equity, some capital appreciation, and generating income. A portfolio of properties can be used to fund retirement. The rents from the portfolio can be used as a source of retirement income. One of the properties can be sold if you need funds.

Real estate can diversify a stock and bond portfolio. One advantage to real estate is that it tends to be non-correlated to the stock market. The financial crisis proves that this is not always true. But the rents from rental properties still came in during the crisis. The main investors hurt were the one who were buying and selling for appreciation. Rental property is best held for the income generating aspects of it. Rents keep coming in when stocks or bonds are down.

Another benefit is that the mortgage and other expenses can be deducted from income taxes. This can help offset other forms of income and the rental income you collect. You can deduct the cost of repairs and maintenance as well. These tax breaks can save a lot of money. A good tax accountant can help you to claim the numerous deductions associated with rental property.

Rental property allows you to be the boss. Have do-it-yourself skills? Renting homes may be a suitable investment that makes good use of your skills. Homes and apartments need frequent maintenance. The more you can do yourself the more money you save to use for future rental properties.

Rental property isn't for everyone. But it can be a good investment and has many advantages to those suited to being landlords. Income generation and building equity can be real assets to your portfolio.

Interested in rental property? For further information I would recommend Property Management Kit For Dummies available at Amazon.com.



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