Benefits of Owning a Rental Property
Many individuals are familiar with being tenants and renting properties but have never considered owning a property and renting it to others. For those who are looking to purchase a property as a rental home, Harland Property Management, a premier property management company in San Diego, outlines a few of the major benefits.
One of the main reasons why individuals invest in rental properties is due to the additional income the property will generate. When renting a home, apartment or condo, owners have the opportunity to acquire cash on a monthly basis. When this occurs, it is called a landlord’s current income; the amount of cash that is left over after the mortgage is paid.
Another benefit of owning a rental property is appreciation. Many individuals purchase properties hoping that in the next few years, the overall price of the property will appreciate in value. Unfortunately, appreciation is not always guaranteed. In more rural and suburban areas, there may be inflation causing the price to decrease with time. For stable areas such as cities, the chances of steady appreciation are greater.
A rental property may also provide tax benefits if you do not receive net cash flow after expenses are deducted. As a result, your mortgage is being paid down for you by a renter, you do not have to pay taxes on this money, and you own more of the total value of the property. Another tax break that owners can take advantage of is called tax-free exchange. The process allows you to avoid paying taxes on the sale of a rental property if you sell it and reinvest in another property.
Owning a rental property can help you on the path to a successful financial future. A rental property allows you to add another type of investment to your retirement plan. Why is this important? Diversifying your portfolio adds additional ways in which you can generate steady income for your future.
Are you a New Landlord Who is Overwhelmed by Your Responsibilities?
There are many other responsibilities the go along with owning a rental property including tenant screening, landscaping upkeep, maintenance repairs, accounting and more. If you are a new landlord who is feeling overwhelmed by your duties, contact Harland Property Management. We are a trusted San Diego property management company that specializes in management services. Our team of expert agents, contractors and CPA’s ensure that all of your landlord responsibilities are being met and taken care of. Contact us at 858-367-0343 to learn more about how our services could help you add to your monthly rental income.