Buying houses for rental purposes is a lot more attractive in a
buyer’s market. Many Americans are in a tight spot these days and it seems as
each day dawns we hear more bad news about the current recession.
The Housing and Financial collapses and dips have actually made it
more favorable for real estate investing.
The sheer fact that property values are depressed and interest rates are
down makes this the opportune time to consider real estate as a long term
investment.
The advantages of rental properties are quite numerous. Fact is
that you when you own real estate you own a tangible asset. The possibilities are great and it snowballs
from there
1. Current Income- This would consist of “rent” money that is left
over after the mortgage, insurance, utilities, and maintenance repairs have
been paid. Current Income is cash that
you did not have to work for on a regular basis, your rental property produced
it for you.
2. Appreciation- Generally real estate increases in value as time
passes, though appreciation is not guaranteed.
If you own a property in a stable area, the property will be more likely
to appreciate over the years. Even the
not so great properties in the less desirable neighborhoods may appreciate due
to inflation in general.
3. Tax Advantages- If you do not receive a net cash flow after all
expenses are deducted, there is a possibility that your rental income may be
tax fee. What this means is that your
mortgage is being paid down monthly, yet you own more of the total value of
your rental property, giving you more control being that you don’t pay taxes on
the money that is allowing you control.
You may also consider tax free money by refinancing the loan if the
property appreciates AND interest rates have fallen. Lastly, you may be able to avoid paying the
taxes when you sale the property, providing that you sale it and reinvest the
money in another property. This is
normally referred to as “switching” or “tax free exchange”.
By listing a few key point advantages of owning rental properties,
I hope this will excite you and provoke you to take advantage of today’s buyers
market before it’s too late.