Renting out your home and becoming a landlord can be a smart financial decision. Even if rent payments don’t match your mortgage payments, the tax benefits and long-term wealth creation of owning rental property can be profitable and better than selling your home. Here are some reasons why renting your house is better than selling.
Did you know that your home that you live in now is considered a Liability and not an asset? When you think of the words asset and liability, what comes to mind? In simplest terms, an asset earns you money, a liability costs you money. Assets are things which generate cash flow for you, while liabilities generate expenses, or negative cash flow. Your home that you live in most likely is not generating cash flow for you. Now if you turn that home into a Rental Home, your home will be generating cash flow.
Long Term Cash Flow
You probably have a mortgage on your home now, but let’s look ahead to when that mortgage is paid off. The monthly cash flow your Rental Property will generate continues, and increases after your mortgage is paid. As rents increase, so does your cash flow!
There are numerous tax benefits to owning a rental property. You can write off all of your expenses, like property management fees, utilities, repairs, mortgage interest, property taxes and asset depreciation to name a few.
Avoid Loss in a Down Market
In the event the market takes a turn for the worst and selling your home is not in your favor, you can hold on to the property and rent it out until you can actually make a good profit from selling.
It takes discipline to save or put monthly deposits into retirement accounts. Owning a rental property is a commitment that you are required to manage and maintain for the long-run. A rental property can help you build large returns in equity and cash flow.
You can use your rental property as a vacation destination and rent it out when you are not there. The money from the rent helps pay for some if not all of the costs. Enjoy your vacation home!
INETO REAL ESTATE SERVICES
2002 Timberloch Pl Suite 200
The Woodlands TX 77380
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