My First Apartment
Whether you’ve added children to your family, you’re a couple of empty nesters looking to downsize or have to relocate for a new job, deciding what to do with the first home you buy is a big decision.
You could sell and put the profit toward a new down payment, or you could keep the house and potentially increase your monthly income by renting out the space. While the first option is most traditional, becoming a landlord is an option worth considering, and here’s why.
A Rental Property Can Bring In Extra Income
With more and more people renting instead of buying, and the cost of living increasing in most cities, renting doesn’t come cheap anymore. In fact, the average monthly rental payment in the U.S. is $1,381.
Once you figure out how much you can rent your home for, calculate how much it compares to the cost of your mortgage, taxes, maintenance, and any Homeowner Association fees. If there’s potential to profit from renting, you might want to hold on to your real estate investment to create an easy positive cash flow.
You’ll Want To Consider Taxes & Laws To Maximize On Benefits
Yes, extra income sounds great, but being a landlord is more complicated than just watching your bank account increase. As a homeowner, there are a ton of laws to understand including taxes and state-specific landlord laws.
As a rental owner, many expenses are tax deductible such as interest from your mortgage payments, property taxes, repairs and more. In addition, there are landlord laws to protect you from tenants who don’t want to follow the rules. All of these things can make the renting process easier.
Plan For Your Future With Your Real Estate
Depending on where your home is located, its value has the potential to increase significantly and ultimately leave you with a nice nest egg when you do decide to sell. Analyzing market and business trends in your area can help you determine whether to sell or to hold on to your property.
There are many things to consider before becoming a landlord, like whether you want to work with tenants or not and the tax laws associated with owning a rental property. If you feel like you’re up for it, your rental property can double as a revenue source and ultimately boost your financial situation.