Investment property: Taking the role of landlord Looking for 300% gains on your investment property? Or are you wondering whether you should go for the role of a 'landlord'? In fact, being a landlord has both sides of the coin. Check the facts out before you jump into something- The advantages of becoming a landlord in a multi family housing ? Being a landlord or purchasing by purchasing a multi family housing is comparatively less expensive. The expense you will incur for a duplex is lower compared to your expense incurred to buy 2 houses. This gives you less burden of debt and you will have to worry about risk next to zero. ? If you become a landlord of a multi family property, this means that when one of your tenants has left, rather than facing a halt of monthly income, you are loosing only a fraction of your income (since there are multiple tenants in a multi family housing).
This way, if you are under debt, you are being able to pay out your mortgage easily. ? According to experts being a landlord in this kind of housing is easier to finance. It is easier to get finance for the commercial units. People got finance in even the sluggish market of last year. This way, being a landlord of multi family housing is posing less risk for you.
Moreover, each unit being comparatively less expensive to rent, you are likely to get tenants fast. ? The core problem with this kind of housing is- they tend to keep you troubled with toilet choked. But critics say that the other advantages of being a landlord of a multi family housing is- you have to maintain only one roof and single foundations. The industry shift The current housing industry is facing a down slope, especially regarding the single family home sector. But interestingly, we the situation is not the same for multiple family house owners or landlords. Rather, home rentals are showing a healthy growth trend.
There are rational reasons behind this. In the past homes were expensive. So, so the shifting cost of the tenant was not feasible compared to the high rental.
On the other hand, sometimes the monthly payment on mortgage was almost identical to the monthly rent of the houses. But today, we are undergoing a fully opposite situation. The tax benefits If you are a landlord, you are in liberty to swap rental houses or business property tax-deferred for other investment real estate. But this does not apply to your personal residence. This benefit is supported by IRS Section 1031.
By this law, it becomes easy to swap or trade off between smaller rental properties with a bigger investment property. Thus it becomes practical that as a landlord you will avoid the capital gains. The setbacks It takes a lot of time to maintain and take care of multi family houses. Being a landlord in this way is like doing a full-time employment. Being a landlord will require that you will deal with tenants, screen out favorable or unfavorable tenants.
Moreover, you have to take care of all the legal issues regarding your investment property. Sometimes you may even have to hire people for this job.
Karl Hopkins is author of this article on Landlord. Find more information about Investment property here.