Rental homes can be the IDEAL investment in today's market because they offer a much higher rate of return than alternatives without the volatility of ups and downs in the stock market.
IDEAL serves as an acronym to identify the advantages of rental properties:
- Income from the monthly rent contributes to paying the expenses and a return on the investment
- Depreciation is a non-cash deduction that contributes a tax shelter
- Equity grows monthly as the mortgage amortizes due to some of each payment being applied to the principal
- Appreciation is achieved as the value of the property goes up
- Leverage can increase the return on investment by using borrowed funds to control a larger asset
The combination of these characteristics working together makes rental real estate a very good investment for today's economy and years to come. Increased rents, high rental demand, good values and low non-owner-occupied mortgage rates contribute to positive cash flows and very favorable rates of return.
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Great blog!I agree with your statement. Nowadays, buying property is the safest way to invest money. Real estate is known to be the most effective type and worthwhile expense at all, and it will make quick money by looking into making an excellent and smart decision of expense.
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