Between 2005 and 2009, the US Census Bureau estimated more than 37 million homes were rented in the United States. Millions of rental property owners already know that their assets provide them the advantages of income, tax breaks and security. In addition, these individuals feel the pride of ownership that comes with buying a property of your own
Owning a property gives you a sense of security. In a difficult financial and economic climate, a rental can provide you with a safe haven. In addition, rental properties create options. If you wish to move into their rental property, you can. Conversely, if you need cash, you can try to sell the rental property to raise a profit. Owning a rental property can offer you a fallback option, no matter what life throws at you.
Rental properties allow you to claim tax deductions. You can write off the rental property’s depreciation, which refers to the amount of value an asset loses over time. Any improvements or repairs you make also count as tax deductions. If you pay a mortgage or have any other operating expenses to keep the rental property habitable, you can claim those tax deductions as well. Even theft, damage or destruction to the property can give you a tax deductionPassive Income Many people wish they could earn money without having to work. Owning a rental property offers you just such an opportunity. Rental properties can make money without much effort on your part. As long as you do your part to keep the property in good condition, such as taking care of maintenance issues when they arise, you will not need to expend very much money or energy towards making your investment profitable.
Thanks to the generosity of the U.S. Congress, real estate allows you to take an annual tax deduction for the loss in value of your real estate. Ironically, while you are busily taking a tax deduction for the lost value, the actual worth of your property is going up. Real estate has taken a temporary hit in terms of value in many places in this country right now, but you get the depreciation credit even when real estate values increase (which is most of the time).
Capital Gains Taxation
Whenever you purchase something and its value rises while you own it, the federal tax code requires you to pay a special tax on that item when you sell it. Fortunately, no tax is due until you sell it. While there are a couple of steps involved, you can also extend the time you have to pay that tax in the event that you do sell it, which is a major benefit to all those who are able to capitalize on this little quirk of the tax code. Appreciation – Real estate appreciates – increases in value – far more frequently than it loses value. With these increases come the opportunity for you to add to your net worth. You’ll still have the monthly income your positive cash flow provides, so you have a second way to cash in on real estate. A third way is if you bought it at a great price. You could look at the trickle of monthly income as a down payment on the flood of cash that will come your way through appreciation – value you can benefit from by selling or by pulling equity out to help fund future purchases or use for anything you like.
Pride of Ownership
Do you remember how proud you felt when you got your first car? It may have been a beat up Volkswagon, but it was yours. Imagine how your chest will swell with pride when you drive down the street or fly to a different city across the globe and look at your house, and you realize that you own another just like it across the street, and several others that are even nicer just around the corner. There’s no better feeling in the world than knowing that you own something that so many others only dream about.
There are lots of great reasons why you should want to own real estate; these are just a few of them. If you are smart, then you will begin to build a portfolio of appreciating assets that will add to your net worth on a year to year basis. You can look at your net worth on paper and try to comprehend what all those zeroes mean, but the biggest prize will be the looks of adoration in the faces of your family and friends when they realize that your time is their time, that they have your undivided attention, and you can go anywhere or do anything you want to on any day of the year, because you had the good sense to start investing because Empire Realty told you it was a good idea!
So invest now, and reap all of the rewards that are waiting to come your way!