Even if you’re not ready to go into sole proprietorship of commercial real estate as a full-fledged business, you can opt for investing in residential rental properties and get rewards accordingly. The real estate business is tricky – with an inflated market and oversaturated competition, closing a deal with prospective buyers can actually take its toll on you.
Take Linx Condos, for instance, which is doing pretty well considering the market of residential real estate in Canada. To motivate you for investing in real estate, consider the following reasons below.
Leverage Properties For Further Purchases
In residential real estate, you can use your debt to your advantage and purchase subsequent properties by showing the credits of previously existing ones. For instance, suppose you’ve borrowed a property from a dealer by leveraging other properties in your possession. Now, as soon as their prices go up, your debt will potentially decrease as well, making this a win-win situation for you in both cases.
You Can Supplement Your Cash Flow
There are plenty of costs involved with buying and maintaining properties. As a realtor, your job doesn’t end with the purchase of the property. Instead, it increases exponentially, drifting you to several costs pertaining to maintenance, utilities, repairs, insurance, debt service, and tax deductions.
If your property has a good cash flow from the rent charged, then you can cover the overhead costs and save for yourself as well. Most retirees prefer renting out a portion of their residential properties or buying a property whose market value only progresses with time. The income acquired from the rental properties actually helps to supplement their post-retirement plans.
Self-Managed Properties Help in Tax Deductions
First things first – you’re required to pay taxes on rental properties, but you can leverage your self-managed properties according to your use. With miscellaneous property overhead costs such as insurance, debts, maintenance, and utilities, you can actually reduce the amount payable as taxes and use it for covering your expenses.