Having money is good. Having more money is better. Making your money make you more money is the best. That’s the ethos behind having and income property, having something that is itself an asset and something that makes money.
But there the rent money is just the tip of the iceberg here. Some are even more powerful than cash itself.
Let’s run through other aspects about your potential investment property.
Better Than a Piggy Bank
By and large, properties that are maintained and minimally upgraded see values go up. This is especially true for areas that are seeing development by business, government entities or other homeowners.
That means the $200,000 in debt and/or cash you put into a home will grow in value as time passes. Once things reach a certain point, you can cash out with a profit and start the process over again.
This is the basic play for all of capitalism. And the best thing about investing in rental properties is that you can collect on the cash they generate.
The Taxes Might Could Fall in Your Favor
The U.S. tax system is a morass of this-and-that. But owning property can fall in your favor when it comes time to settle with Uncle Sam.
You can deduct local property taxes, rental expenses and even the fees for rental management companies can be deducted from your tax burden. You might even be able to get extended personal use out of the property and get the rental tax benefits if you dedicate time to renovating and maintaining the property.
As with many things in life, it’s a good idea to check with a tax attorney to make sure you don’t walk into anything you can’t pay for.
Buying Income Property Fits in Strong Real Estate Markets
Say what you will about the state of the local market: there are plenty of reasons for buying a property for rent in New Jersey. One of the top summations of why is that this is where it’s all happening. New York City is just to the North, D.C. to the Southwest and Canada is hop up the road.
Plus, the indicators are now showing that the U.S. economy is cooling off a bit. But the calls for recession Chicken Littles have tamped down. So, buying a property now won’t have an immediate decrease in equity.
People are always looking for a place to live. And during strong economies, people are more willing to shop by this like location, amenities or size as opposed to cost.
It’s a little dark to say out loud. But it’s a point worth making. Even if there is a recession, your rental will likely see increased interest because people who are hurt in the downturn will look to downsize or down-cost their living expenses.
Who Ya Gonna Call?
Get started with a search for the home that will be your perfect income property.
The beginning of your financial independence starts with a first step. Let that first step be in reliable, prudent investments in time-tried strategies around investing in rental properties.