Investment Rental Property

Investing in properties is a challenging job. After buying you are required to manage maintenance, insurance, electricity bills, repairing, and water taxes and so on. If you just buy and keep it as it is you will certainly be at a loss. Renting a property can really solve this problem.

Let’s suppose that you bought a house for $120000. Suppose the market value of the property drops to $90000 after thirty years later. You will be at a loss. And the tragedy will increase if you have left it alone. Here is where renting a property is very useful and profitable.

Suppose you are charging $1000 per month. Then the annual income will be $12000. Lets us suppose that an average family lives in a rental house for not more than one year. Then every year you are expected to see one change. Lets suppose, it takes one month for changing rental family. You are expected to earn $11000 per year. If you keep the house on rent then one thing is for sure that you will not have to pay any expenses as far as house is concerned.

If you think of saving money by not spending in maintenance and repairing of the house then you are completely in wrong direction. You need to think that this is necessary and if you not do so your house will be soon in bad shape and you will have to reduce that monthly rental.

You can on many times come across persons with a criminal background and will to locate in your rental house. It will be quiet certain that you don’t have the information that the person is of criminal background. This can be very dangerous. You should sure before renting the house that the person is good. This will require some research but it is necessary. I came across one woman who used to give false check to her landlord. She was soon caught and found herself in jail.

MAGI (adjusted gross income) is supposed to be $25000 if you income is less than $100000. You can thus claim for rental loss. However if your income is over $150000 then you cannot claim for rental losses.

There are many more reasons to buy a rental house. It’s really even today believed that the cost of the real estate will increase in the coming years. Also you enjoy tax free and tax differed sales benefit.

The best way to buy the rental house is to buy it as if you are buying your personal residence. Make sure that the house is in perfect working condition. It should be well maintained and next to a living paradise.

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