If you’re wondering if being a landlord is worth the time and the effort, the short answer is yes, absolutely! We’ve compiled the top 5 reasons why.

Great Passive Income

Passive income is any income generated that you’re not actively working on. Generally you put in a fixed amount of work at the start, and then your time and capital keeps paying off. Rental properties are phenomenal ways to generate passive income! If you’re looking ways to generate long term-wealth, you’re going to need find ways to keep that passive income flowing, there’s only so much time available, and time creates an income ceiling by default. Be careful of passive income becoming a job though- consider hiring a property management company. As long as your profits exceed your costs, you’re still making money. Avoid the temptation to do it all yourself!

The Rental Market is Great

According to Pew Research, more U.S Households are renting now than any point over the last 50 years. From that same study, between 2006 and 2016, the total number of households grew by 7.6 million, but home ownership rates from that same time frame remained flat. This is amazing news for landlords!

High Return on Investment

While to be a landlord, you’ll definitely be putting up some money up front for the property, generally you can expect your tenant’s rent prices to cover your expenses, including your fixed expenses, variable expenses, and even interest on any loans. More than that though, real estate is considered a high-performing asset, and has a very high pay-out over the long-term.*

Access to a Plethora of New Tax Deductions

Becoming a landlord also opens up new tax deductions to keep more of your money in your pocket (and not Uncle Sam’s). Landlords can deduct interest expense on loans and credit cards, depreciation on properties, taxes, property repairs, maintenance, insurance and more.** Of course, a qualified CPA (which we are not) can help you make sense of all of this and maximize your take-home income.

Rent Prices Rise with Inflation

Rent prices are unique in that they rise when inflation does, which is excellent for a landlord’s bottom line. When inflation rises, so do your rent prices! They’re not fixed at a rate that is below what you’d need to charge to remain profitable.

*https://www.rentalutions.com/education/articles/7-reasons-why-you-should-buy-investment-property-become-a-diy-landlord

** https://www.landlordology.com/tax-deductions-for-landlords/