Owning Income Property Might Be Easier Than You Think
Posted by New Home Resource on May 3, 2017 in
Do you know the difference between owning income property and being a homeowner? In many cases, the only thing that separates the two is your mindset. That may sound odd, but often it’s simply shifting your outlook from an “I can’t do that” to a “Why not?” frame of mind.
Here in Las Vegas, a lot of people have discovered that owning income property is a possibility, and it’s actually a lot easier to start creating a real estate portfolio than they realized. Often, it begins with making plans to move from their existing home into a new one – and deciding to keep (rather than sell) their current home and rent it out.
Many people may read that last paragraph and reply with “I need the money out of my current home to buy the new one!” In some cases, that may be true. But the truth is, most people automatically make that assumption – without sitting down with a professional to crunch the numbers. Surprisingly to many people, it’s entirely possible that it may actually make more financial sense – for tax or investment reasons – to own income property than to sell that home.
For the most part, we find that many homeowners choose to convert their primary residences into investment properties for one of two reasons.
First, if the housing market is struggling and you’re concerned the home’s value has dropped, you can postpone selling the property, rent it out to pay for the monthly mortgage payments, and then sell it when the value has risen. This was a common occurrence during the financial crisis of 2008 – as many homeowners went this route to stay afloat while the economy got back on its feet.
The second reason is that many choose to take advantage of excellent financing now available at the current low interest rates to purchase their next home, leaving them with the option to turn the original home into a rental and increase their income. This can turn out to be a great opportunity, often with a better return on investment than the stock market. Additionally, if the home was originally purchased as a primary residence, it likely had a low interest rate – and when you transition your home to an investment property, you’ll be able to keep this perk.
Whichever route you choose to start the first of your (hopefully) many rental properties that will bring you additional income over time – be sure to make yourself aware of the responsibilities you bear as a landlord to ensure all the legal requirements are met. And of course, having the assistance of an expert in this area is invaluable – from knowing the state of the current local rental market to the financial obligations and details that must be attended to.
The best way to start off on the right foot in owning income property is to find the right Property Manager to help you be assured that you’re doing it all “right” from the start.
Recently, New Home Resource posted a 4-part series of articles that explain in detail “How a Property Manager Takes Care of Business.” In this series, you’ll find out pretty much everything you need to know about taking care of your rental home – as well as why it’s a good idea to work with an experienced Property Manager; including ways to protect your investment, locating and taking care of tenants, and much more.
So, before you just decide to list that home for sale and move to the next one, give some thought to the fact that this may be your chance to start building a real estate ‘empire’ of your own. One that can not only bring you and your family additional income, but help to improve your financial bottom line for the future, as well. And always remember that the professionals at New Home Resource Property Management are here to help you find your best options to make it happen.
New Home Resource helps current and future homeowners with all of their Las Vegas real estate needs. Whether your preference is for property management, a newly built home from a local builder, or a resale property in just the right location, a New Home Resource Realtor® is here to provide the service you’re looking for. Please contact a New Home Resource Realtor® today at 702-365-1000 or visit www.newhomeresource.com. Broker Joanna Piette, and agents Denise Moreno Thrasher, Jessica O’Brien, Evelyn ‘Beng’ Kern, and Kathy Paterniti are all here to help!