Downsizing isn’t just for empty-nesters. Many of us are embracing the minimalist lifestyle, choosing smaller…
Have you thought about renting your home? Renting is a perfect option for anyone looking for less responsibility. Buying a home can involve serious saving and commitment, but renting can help maintain flexibility and lifestyle.
In addition, there are some serious perks to homeowners who rent their property.
Who Doesn’t Like Extra Income?
Not everyone is ready to own a home, but everyone needs a place to live. If you have the property, why not invest in your home to provide a residence for lease? You’ll make a profit while the renter has the safety and security of a house. After the initial startup of advertising the property for rent, drawing up a lease, and completing any maintenance work, you’ll have a passive income stream that requires very little of your attention. Once you are well ahead, you can use some of that extra cash to build a bigger property portfolio, save in your 401K, or retire to your favorite island.
Security and Flexibility
The security of a steady income stream resolves a lot of personal stress. Saving money for a rainy day or to invest in another property opens doors for more opportunities for you. Conversely, if your personal situation changes, you still own a home and can fall back into it as leases allow if you find yourself in need. When you invest in your home, you have the flexibility of managing your own business. You are the boss. You get to make the decisions on contracts, terms, and selling and buying assets.
It’s a Renters World
Rental rates have risen by 8% across the U.S. and here in Eugene, it’s at 7%. Renting offers a more economical choice for many Americans, and more freedom, too. They enjoy not being responsible for a new roof or a new dishwasher, and the affordability of living in the neighborhood they prefer. In today’s fluid job market, renting also makes it much easier and less stressful when one has to move quickly for a new job opportunity.
You already own one home, so you’re undoubtedly familiar with the tax breaks included with homeownership. Imagine two or three or more. If you’re owning and managing multiple properties, you become employed by yourself. You also have additional benefits of writing off any operational expenses as well as all maintenance activities. Keep meticulous records and consult with a tax professional for additional advice on tax incentives.
Leverage & ROI
Property ownership provides leverage and leverage offers a big return on investment. Banks will easily consider you for a mortgage loan, or for a few mortgage loans. When you provide the lease of property to renters, you do so at a profit. This profit provides you discretionary income to invest in more property or in other bank products. Mortgages offer a high return on investment and everybody wins when the deals are made and honored.
The Bottom Line
When you invest in your home as a rental property, you’re investing in your community. You’re providing safe and affordable housing in a blossoming locale. You control the rent and can keep it steady when the cost of living rises in your area, keeping people in their homes. Neighborhoods are stronger with stable housing and consistent residence. People are secure when they can count on their community and you help contribute to all of this as a landlord.
You can invest in real estate by flipping homes, buying wholesale, or purchasing distressed homes. When you invest in your home, you also create consistent cash flow for yourself and affordable housing for your neighborhood. That’s a win-win by anyone’s standards!