Real estate is always a hot topic of investment. And, with more than 44 million American households renting today, it’s no wonder why investing in rental properties is more attractive than ever.
If you’re on the fence about whether or not becoming a landlord is a smart move, this blog will give you compelling reasons to jump-start your real estate investing career by becoming a landlord.
1. Passive Income
One of the main benefits of being a landlord is the potential for generating passive income. This means that you can earn money without actively working for it. In other words, you can generate income even while you’re sleeping.
This is possible because you’re essentially earning rent from your tenants. And with the average rent in the US reaching $1,877 per month in December 2021, this can be a significant source of income.
Because the rent prices are always changing, you have the potential to earn even more money over time. And as your income grows, so will your ability to live a comfortable life and achieve financial independence.
2. Tax Deductions
Tax deductions are a benefit for landlord jobs that can save investors a lot of money every year.
To take advantage of this benefit, landlords must carefully track their expenses and keep meticulous records. Doing so will allow them to deduct a variety of expenses, including repairs, maintenance, and insurance, from their taxable income.
This can result in a significant reduction in the amount of taxes owed at the end of the year. For investors who own multiple properties, the savings can add up to thousands of dollars.
Given the high cost of renting in many parts of the country, this benefit can provide massive appeal to people considering landlord careers.
3. You Can Take Advantage of Professional Management
Investing in rental property is not without its challenges. One challenge is managing the property itself. From finding tenants and screening them to dealing with maintenance issues, it can be a full-time job.
Fortunately, there’s a solution: professional property management. A good property manager will take care of all the day-to-day tasks associated with being a landlord, freeing up your time to focus on other things.
They’ll also generally have a better network of contractors and suppliers, which can save you money on repairs and upgrades. And if you live in another city or state, a good property manager will give you peace of mind knowing that your investment is in good hands. This is a great benefit, especially for new investors who’re still learning how to become a landlord.
Of course, not all property managers are created equal. If you’re considering hiring one, be sure to do your homework and choose someone who has a proven track record of success.
With the right property manager on your team, being a landlord can be a great way to build wealth for the long term.
4. You Get to Build Equity
When you buy a rental property, you’re not only investing in a physical asset, but you’re also building equity. Equity is the portion of your property’s value that you own outright, and it increases as the mortgage balance decreases and the property value goes up.
Building equity gives you the ability to borrow against your property for other investments or expenditures. And, if you ever decide to sell, the equity is yours to keep.
5. Potential for Appreciation
One of the great things about being a landlord is the potential for appreciation. This means that, over time, the value of your property is likely to increase. This can offer a number of benefits for investors.
First, it can provide a hedge against inflation. As the cost of living rises, the value of your property is likely to rise as well. This can help you keep up with the cost of living and maintain your standard of living.
In addition, appreciation can provide a source of income in retirement. If you sell your property when you retire, the increased value can provide a nest egg that can supplement your retirement income.
Finally, appreciation can offer tax advantages. If you hold onto your property for a long time, you may be able to take advantage of capital gains tax rates when you sell.
6. You Can Live There Too
One of the most appealing things about owning rental property is that you don’t have to look for another property to live in.
That’s right; you don’t have to leave your home just because you’re renting it out to tenants. You can keep living there and enjoying all the benefits that come with being a homeowner while someone else covers the mortgage.
This setup is ideal for first-time landlords who may not have the extra income to cover a mortgage on their own. It’s also perfect for those who want to downsize but can’t afford to sell their home outright because they need the income from rent to cover their costs.
And, of course, it’s a dream come true for anyone who doesn’t want the hassle of dealing with multiple properties.
7. You Get to Make a Difference
Beyond the financial rewards of owning rental property, it’s also gratifying to know that you’re providing a home for someone and helping to improve the community in which your property is located.
As a landlord, you play a vital role in ensuring that your tenants have a safe and comfortable place to live. In turn, this can lead to increased home values and a reduction in crime rates in the area. And that’s something everyone can appreciate.
Enjoy the Great Benefits of Becoming a Landlord
Becoming a landlord is one of the smart investment moves you can ever make.
Not only do you get to reap the benefits of owning a property, such as monthly rental income and the potential for appreciation, but you also get to build equity and diversify your investment portfolio, among other things.
Are you in the market for the best rental property in Memphis? Get in touch with us today and learn how we can help.