Owning a rental property can be both financially and personally advantageous. Among the many benefits of owning a rental property, some of the main attractions are that it can provide a source of passive income, greater security, flexibility to sell at the right time or to even move into the space.
The financial security that comes from being a property owner makes it one of the most sought-after investments. Here’s how you can benefit from owning, buying, or renting secondary properties:
Passive income source
One of the biggest advantages of owning rental property is that it’s a passive income source. It’s a type of recurring income that requires relatively little effort to maintain and serves as an attractive option for people looking to make some money on the side (or save up for their retirement!). Rental income is also taxed differently than employment income, so factor in all your expenses and work out your cash flow before investing in secondary properties.
There are a variety of reasons that people may find themselves with empty property. You may have inherited a family home or may not wish to sell it for sentimental reasons. The safest way to ensure the house isn’t left to vandalism and squatters is by renting it out to trustworthy tenants.
Often maintenance issues can pile up in an empty home and may quickly escalate into larger problems. It’s hard to always keep an eye on a home you aren’t living in, so a steadfast solution is to rent the property out to tenants. This can give you greater peace of mind that the home is being looked after.
Flexibility to sell at the right time
Timing is everything. You may be looking to move out or sell your current home, but the market conditions may not align with your goals. Rather than selling your property for a loss, a useful alternative is to rent out your property until market conditions improve.
Renting out your property gives you the flexibility of selling once you’re in a better position. Hold onto your home until your home value appreciates in order to make a profit off your property. While the amount of appreciation varies by market, a trusty real estate agent can help you research the appreciation potential of different cities and neighborhoods to see what you might be able to expect.
There are several factors that can make your rental stand out to potential tenants:
The quality of your revenue is also contingent on your tenancy. While you research potential rental properties, make sure to also do your research on the neighborhood.
Proximity to amenities is a major factor in tenants considering your property, such as walking distance to grocery stores, parks, proximity to public transportation, major highways, and more. An expert estate agent can help you identify neighborhoods and homes with the best rental potential.
In some areas, off-street parking is a requirement for rental property. Parking is often a desirable feature that attracts a higher quality of tenants. Keep an eye out for homes with a parking garage within 4-5 blocks of the property.
The burden of expenses is greatly reduced if a building has separate utilities associated with each unit. As a renter, you don’t have to worry about breaking down these costs. Enjoy the convenience of attached utilities like a common washer-dryer that charges renters fairly.
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