With a new year approaching, many of us take the time to review our financial goals and investment opportunities. If you’re looking to make changes to your investment portfolio why not consider an investment in rental property?
Rental properties have proven to be a stable investment option in the Brandon area and are a good addition to your portfolio that may already include investments in Registered Retirement Savings Plans or a Tax-Free Savings Accounts.
There are a number of advantages and benefits to investing in rental properties. In terms of dollars and cents, you receive a monthly cash flow, which is secure and predictable as long as the rental property is occupied.
As well, you pay less tax as certain expenses such as mortgage interest, property taxes, insurance, maintenance, property management, capital cost allowance (depreciation) and utility bills, as all of these items are allowable expenses for tax purposes. In addition, if you have losses for tax purposes on your rental property, you can deduct it from other sources of income.
From a community economic point-of-view, an investment in rental properties means that you are contributing indirectly to the economy through job creation (construction jobs, maintenance, etc.) and are having a positive impact on the community by creating much needed housing options. These socially responsible actions go a long way!
As you look to the future and other advantages, you quickly learn that you are earning equity in the property as you pay down the mortgage. This equity that you build in the investment will allow you to sell the property or borrow against it to purchase more real estate or invest elsewhere. As well, with the cost of construction increasing each year, the value of your property will increase as well. This is generally based on cash flow generated at market rental rates.
If you are at all concerned with the day-to-day challenges of dealing with rental properties, one of the best options is to enter a contract with a licensed property manager. For a small fee, a property manager will take care of screening tenants, showing the units, scheduling move in or move out appointments or maintenance, collecting rent and handling after hours complaints or emergencies. The end result is that you end up with a great, stress-free investment with all the benefits.
To find out more about investing in rental property real estate, contact a local property manager or real estate agent.