1. They’re Not Just For Investors
Many buyers don’t even consider a rental property for their first home an option—but we’re here to tell you that it could actually be your best option.
Rental properties are not just for high-roller investors who buy properties left and right and hire managers to maintain them so they can live off premises. In fact, many people who buy rental properties take the owner-occupant approach and live in the same home as their tenant, in different units or floors.
You can also get a better interest rate and a lower down payment on an owner-occupied mortgage.
2. Rental Income Pays Your Mortgage
Perhaps the best perk of all is a plain and simple one—the rental income you make will help you pay (or in some cases totally cover) your monthly mortgage bill. You’ll be building equity without paying for it.
3. Go Big Or Go Home
With a rental property, you can typically afford a bigger or more expensive home than you’d be able to buy without the added income. This functionally lowers your cost of borrowing money. You get lots of property without lots of payments!
4. You Get Two (Or Three, Or Four) For One
When you’re looking to buy a rental property, you’ve got options when it comes to style. You can choose a duplex, a condo, or you can even find a way to renovate your home’s basement or ground floor to be suitable for another independent apartment.
But the main commonality between all of these styles—you’re getting two living spaces with only the cost and maintenance of one. The two most expensive parts of a home are the foundation and the roof, thus the total for the whole dwelling is much lower.
5. The Cash Flow Never Ends!
Although thirty years seems like eons away when you’re signing away on your mortgage, it will eventually come to an end. When your mortgage is finally paid off, you can keep renting and keep making money—except after you own the home outright, all of that income is yours to pocket.
6. They Cater To Growing Pains…
The cash flow never ends if you don’t want it to, that is. In the future, when you have more income and are more financially stable, you can choose to occupy the entire dwelling.
As long as you’re not violating the lease you have with your tenant, you can expand your living space exponentially.You can renovate it, create an in-law suite, or simply move your growing family next door and get more home without all the hassle of moving or buying and selling.
7. … And Also To Wanderlust
Some don’t see moving as a hassle, and many choose to live in multiple places over the course of their life. By owning a rental property, you have the freedom to move around as you please without taking a huge financial hit or go through the selling process. Renting out the place and continuing to collect income to go towards another home for you to live is a common option.
8. Your Wealth Will Grow And Grow
Inflation will provide two sources of wealth building: one from annual increases in rental income, and one from rising property value over long periods of time. Over time, both of these benefits tend to match inflation, all other things being equal.
9. It Diversifies Your Income Stream
Having two (or more) totally separate streams of income is a surefire way to cover your behind if something leads to you losing one of them. For example, if you lose your job you still have the income coming in from the rental property to keep you on your feet until you find something else. Talk about a smart investment.
10. It’s All About Leverage
Your investment will beat the average. In addition to inflation-adjusted income, you get leveraged income. Let’s look at a quick example, assuming your mortgage has a fixed-interest rate.
Take a look at your net income—instead of going up 3 percent, it’s actually going up 9 percent.
11. Having Tenants Isn’t So Bad
Don’t let the thought of having a nightmare tenant cloud your vision—the truth is, most renters who intend to party all night look to live as far away as possible from their landlord. In fact, having a tenant can be more awesome than you’d think.
If you establish a good and long-lasting relationship with them, they’ll probably treat their unit with extreme care, help with the upkeep, and even look after it when you’re on vacation.
Pro tip: If you can, choose to live above your tenant—heat rises so you’ll save on your bill, and you won’t have to hear their footsteps walking around all day.
12. You Can Write off Ownership Expenses
If you own a rental property, there will be rental expenses. There’s really no way around that one. The good news is, if your sewer line breaks in your three-floor condo, you can write off two-thirds of the cost of the repair. You wouldn’t be able to reap these benefits in a personal residence.
13. It’s A Whole New World (Of Skill Sets)
Becoming a landlord will open you up to a whole new skill-set and you’ll undoubtedly wear many hats. You’ll learn how to deal with professionals, how to do your own repairs, how to advertise your unit and be a salesperson, how to negotiate, and how to be a supervisor.
You’ll understand the ins and outs of homeownership while being a landlord, and be building towards your great investment at the same time. In addition to providing a home for others, you’ll be adding real monetary value to your life and your family’s—quite the reward for a potential headache or two.
