- Share
Many people debate whether or not you should rent or buy a home. Many are happy renting. They have a place to live without any responsibilities that come along with homeownership. However, just as many people don't want to waste their money by renting. They want to work on paying off their home and getting equity.
Then, there are those who want to invest in real estate. Many people do that by buying single-family homes and apartment buildings and becoming a landlord.
Here are some reasons you should consider being a landlord.
Easy to finance
Finding cash to start a business isn't always an easy task, especially with businesses that might not make a profit right away. However, it is pretty easy to finance a single-family home or even a multi-unit apartment building. Most lenders are going to feel pretty safe lending you money for rental buildings.
Make a profit
The most common reason to become a landlord is to make money. By buying the right home (or apartment complex), you should be able to charge more for rent than your mortgage. This gives you some extra cash every month.
That being said, you need to save some every month to help pay for any repairs that you need to do.
Gain equity
As your tenants pay the mortgage every month, you gain equity in the home. You can use this equity to pay for repairs when needed, though you may also want to buy more property with it too!
Tax benefits
There are many tax benefits for landlords. You can deduct many things including the interest that you pay with the mortgage, any depreciation, and any repairs that you do to the property. You can also deduct any of the insurance premiums that you have on your rental property. If you work from home (or one of your buildings), you can also deduct your home office expenses.
By deducting all of these expenses, you are keeping more of your hard-earned money.
Your own boss
When you start a real estate investment business, you are your own boss. You can buy the properties that you want, choose the tenants that you think will work, and take care of the property the way that you see fit.
You can work around your schedule. In fact, many have full or part-time jobs in addition to being a landlord.
Good retirement income
Though it is not always easy to be a landlord, it is a great way to provide for your retirement years. If you hire a property manager when you are ready to retire, you can keep bringing in the money for many years without too much work. If you don't want to do that, you can always sell your properties to give you the money that you need to retire.
Though you may never have thought about it, being a landlord has a lot of benefits. It is fairly easy to get a loan for a rental property, compared to other loans for small business owners. By buying smart, your tenants will pay your mortgage, and you should even have some extra for a profit! If you are smart, you could also pay off the building early (or buy your next investment property).
There are also many tax benefits. You can deduct a lot of your expenses, allowing you to keep more of your hard-earned money. You can deduct any repairs that you do, insurance that you have to pay, and even interest that you pay with the mortgage. You can also build up equity as you pay it off, allowing you more opportunities to take out loans for even more properties.