It’s already public knowledge that land is a finite resource that’s always worth investing in. However, owning real estate for the sake of owning a piece of something that has a high chance of appreciating over time isn’t the only way invest in real estate. In fact, here are 5 reasons why owning rental property is worth your money too.
Owning a rental property can provide good semi-passive income. You don’t have to keep an eye on it all the time yet it can still generate income for you. Of course, you still have to maintain the property and make sure that it’s always fit for living, but other than that, the upkeep is pretty low-effort and not too much of a hassle. Besides, if you’re really serious about the rental, hiring someone to do the maintenance shouldn’t be too much of a problem either.
Inflation is the main reason why prices are increasing all the time. This includes rental fees for all properties, including housing. By owning a rental property, you are effectively escaping inflation by moving along with the economy. As prices hike, so does the value of your property. You can even increase rent every few years, depending on your local laws. This makes it a very attractive investment if you want something more long-term to sustain your income.
Everybody needs someplace to live – that’s a basic fact. Having a roof on one’s head is a priority for most, if not all, people. Therefore, it’s almost always impossible to run out of renters, unless your rental property is located in the middle of nowhere. If your property is located somewhere more reasonable, though, like in the city or beside schools and major places of work, you’re bound to have a good source of semi-passive income pretty much forever.
Since owning a rental property is basically running your own business, you can take advantage of all the tax deductions that come with owning a business. For example, landlords get tax deductions for property insurance, depreciation, and repairs. That’s right, all repairs done on the rental property is tax-deductible, as they’re also considered a business expense. It’s also possible to deduct interest from any loans taken out for the property. If you’re self-employed and are working from home, you can also deduct any expenses that you spent on the rental property.
Lastly, your property is all yours, whether that’s right now because you bought it with cash or in ten years because you simply took out a loan. Having an additional property title in your name already makes it worth it, as it increases your personal net worth. And it will keep increasing your net worth in the future since, as already mentioned in this article, the value of real estate continuously rises over time.