Reasons to Become a Landlord

Becoming a landlord entails a lot of responsibilities, but it also has many rewards that may not be apparent at first. What are good reasons for taking this step?

Investment. Compared to the stock market, real estate is a more tangible investment. Stock values can disappear totally, but real estate usually does not. As long as an owner is not forced to sell the property, he will be left with a concrete asset that can also help him bargain for additional investments.

Appreciation. According to the U.S. Census Bureau, median home values, even after adjusting for inflation, have almost quadrupled since 1940. While real estate values go up and down, renting out a property keeps at least part of the mortgage paid.

Income. Becoming a landlord provides a steady source of income. Those in need of housing may not necessarily become buyers, but they will always need a place to live and may continue renting. This applies especially during challenging economic conditions when it is more difficult to qualify for a mortgage. In addition, while the mortgage amount on a property remains the same, a landlord can raise the rent annually and increase his income.

Home improvement. Money always talks, but becoming a landlord has other rewards, as well. If you are handy and like fixing things but do not want to live in a construction zone, having investment property provides opportunities to put your skills to good use. Many property owners become landlords because they simply enjoy the maintenance aspects associated with investment properties.

Management. For homeowners who enjoy managing assets and people, becoming a landlord offers a way to do just that. Depending on how many properties one chooses to manage, this can be a part-time effort compatible with maintaining a full-time professional career.

Tax advantages. While details vary according to location, investment properties come with many short-term and long-term tax advantages. Consult a tax professional to find out about deductible expenses and deferring federal taxes in times of skyrocketing property values.

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