Are you getting ready to buy a new home? Before you sell your old one, it’s worth looking into turning it into a rental property.
With so many people not buying houses these days, the number of renters is on the rise. This trend has led the vacancy rate to remain low at around 7%. You won’t have to worry much about not having people to rent to.
Are you wondering if it’s worth it to rent out your home? Keep reading to learn five reasons that getting into rentals is worth it.
1. Cash Flow
While paying your mortgage increases your net worth, your losing money every month. Wouldn’t you rather have a renter pay your mortgage for you?
When you rent a property, you can use rent payments to pay off your mortgage every month. Everything extra you can use to make property repairs and save for other investments. Your rental property cash flow will give you more options.
2. Tax Benefits
When you own a rental you can take advantage of many tax deductions. Below are some of the ones you can look forward to:
- Interest payments
- Property repair
Consult with an accountant to look for the other deductions you can take on your rental property. When you have enough tax deductions, you can potentially save a lot on your tax bill for the year.
3. Guard Against Inflation
When you have your money sitting in a bank account, you lose purchasing power when inflation happens. You can guard against this when you own rental properties.
One way this happens is through your mortgage. You can take advantage of this when you get a fixed-rate mortgage.
When inflation happens, you’ll be able to raise your rent. Since your mortgage doesn’t change, you’ll be able to take advantage and bring in more cash flow every month.
Cash flow isn’t the only thing to look forward to when you hold rental properties. You can also expect the value of your properties to go up over time.
While this may vary on a year to year basis, history has shown that house values go up over time. If you ever get tired of managing your rentals in the future, you can expect to sell your properties for a higher price.
5. Go Hands Off
One of the common concerns for owning rental properties is the work it takes to manage your properties. You need to be on-call for whenever a tenant has a problem. You solve this problem by using a property management company.
A property management company will handle your tenant screening, calls, bill collection, and property repairs. They take a percentage of the rent every month as their fee.
If you want to learn more about property management, head to https://www.managementpros.com/ashburn-property-management/ for more information.
Rent Out Your Home Today
There’s a reason owning rental properties is considered one of the best ways to build your wealth. When you rent out your home, you’re building a source of income you can rely on well into the future. Don’t wait and miss out on the extra income rental properties provide.
Are you looking for home improvements you can do that will help you increase your monthly rent? Head back to our blog to find improvements you can make.