If you're thinking about moving out of a home you own, why not consider renting…
With houses for sale still scarce in Eugene, why not rent your home? Opportunities abound for forward-thinkers who are willing to offer their own home for a piece of real estate gold. Starter homes here are averaging $280K, if you can even find one that makes it to sale before bids are considered.
In the midst of COVID-19, you can sit tight and wait it out, or you can move on with your life while your current home offers you an income stream. Renting your home gives you freedom and security, and here are five other great reasons to think about renting.
Additional Income Source
Not everyone is ready to own a home, but everyone needs a place to live. 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.
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 opportunity 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 in 2.7% across the country and here in Eugene, it’s actually decreased 4.8% over the last six months. 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 the 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.
Return on Investment
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 a 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 high returns on investment and everybody wins when the deals are made and honored.
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.
The Bottom Line
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.