Are you ready to join the millions of American families that enjoy the additional tax benefits of owning a second home? In addition to the taxes, there are several other advantages to renting out your family home.
Before you decide to sell your family home, consider these benefits of renting it out. You may find that treating your family home as a rental investment is a financially smart decision.
Hold Off on Selling
You may have originally planned on selling your first home to transfer the equity into your new home. But if the housing market is struggling, you may not be able to get what you hoped. Renting your family home gives you a chance to wait for the market to strengthen. This will signal a rise in your home’s property value and a better time to sell.
Renting while you wait for the perfect time to sell will cover the monthly mortgage payments and maintenance costs so you can afford to purchase an additional home.
Additional Income
If you’ve already paid off the mortgage on your family home, then you can enjoy the additional income that renting brings. For many homeowners, this return on their investment is better than investing in the stock market.
Low Interest Rates
If your family home was your first home purchase and your primary residence, then it’s likely you received a low-income rate. You can keep this rate after transitioning the property into a rental property. This will keep your expenses low and increase your potential for profit.
Don’t forget that you can deduct the property taxes and interest paid on both homes. You can deduct up to $10,000 in property taxes and $750,000 in mortgage interest payments.
Property Knowledge
Unlike trying to buy an investment property, renting out your family home means you know the property inside and out. This means you know all of the areas that can cause issues. You can plan for these issues by budgeting money for their repair now. This will make your long term profits favorable and keep your investment property marketable.
More Equity
Every time you make a payment on your mortgage, a portion of that payment goes towards paying off the principal. This means you’re building equity in the home. When you rent the home out, you can leverage the tenant’s monthly rental payment to build equity in the home.
You can borrow against this equity to get cash to fund almost anything. You could also use this equity to fund your retirement. You can take out a reverse mortgage in retirement to give yourself income without having to make monthly payments.
More Opportunity for Positive Cash Flow
When you buy a home specifically for investment with the intention of renting it out, you need to balance your investment cost with the viable rental asking rate. This can make it challenging to find a home priced right to create positive cash flow.
If you decide to rent your family home, you probably bought it several years ago. Now you can compare your purchase price with the rental rates of today. If your home has gone up in value, it’s much easier to create a positive cash flow than if you had bought your home for what it’s worth today.
Rent Your Family Home Today
If you’re ready to take advantage of these perks, then we can help you rent your family home. Our experienced and knowledgeable team will perform a property assessment. This will tell you how much you could rent your home for. Then our property management services will ensure that your investment is taken care of.
Contact our team today and let us help you turn your family home into an investment rental property.
