The real estate market is shaking at the moment, with dropping interest rates and an increasing rate of foreclosures. Of course, if you have the money, now is the time to invest in real estate.
Prior to these days, it was more common for individuals to do “house flipping.” This was a process where you bought a house, repaired it, and sold it for profit. This technique actually gave many people an excellent return on investment, and tax breaks.
Instead of the quick cash from flipping, people enjoy the steady stream of income through renting their property out. With a few different locations, this can add up pretty high.
The great thing about this is that it is almost a risk-free investment. As long as the property is managed correctly and the renters are chosen appropriately, all will remain fine.
Although you are the investor, you are also considered the landlord. This means you will be required to do upgrades and maintenance on a regular basis. It also means that overtime the property will drastically increase in value.
Of course, not only can you get a nice steady income from renting your property out, but you can also benefit from many tax breaks. In order to effectively take advantage of these, you will need to keep a good record of your expenses.
Some of the common tax breaks for landlords include mortgage interest payments deductions, repair deductions, and travel related to business deductions. These are just a few of the more well-known tax deductions that many landlords can take advantage of. Just make sure you have the proper paperwork.
In addition, if you purchased the property with financing, you can opt for fixed mortgage payments. As time continues, rent will increase. Once you have fully paid the mortgage off, you will increase the value of the property.
