Insula Capital Group

A sign board of House for rent in white color

Why Owning Rental Houses May Be Right for You

The US housing market is growing in funding and investment opportunities. The demand for properties for both purchase and for renting, are growing even faster! What better time than now to enter the real estate market and diversify your investment portfolio? There are also so many different investment opportunities, one being the rental housing market.

Here are some reasons why owning rental houses may be right for you!

Full Control of Investment

Rental houses give investors full control over their investment. As the landlord, you can screen and decide on tenants, oversee the contracts, have high cash flow, and make improvements as you go along.

For those who don’t want the tedious task of being the landlord, there are always property management companies that can take it off your hands. Rental homes investment will still be an investment that can you thoroughly understand every part of compared to alternative investment options.

Passive Income

It’s a reliable source of passive income. With the economy facing ups and downs, people will still want a roof of their heads. When they can’t afford to buy their own home, they’ll rent. That’s why the rental home market is booming.

Rental houses are an income-generating asset, and after expenses, it’s all “money in your pocket”. Rental homeowners also use the passive income as a retirement fund.

Tenants Pay the Mortgage

Owning rental houses will let an investor get an immense value on another person’s dime. Your tenants will pay the mortgage for you. The property will also be easy to sell once paid down.  It’s also easy to refinance a property that has been paid off.

The Tax Benefits

Another important reason you should look into investing in rental homes is tax write-offs. The tax benefits of owning rental homes are so many that they will make a person’s head spin. The IRS lets owners deduct various expenses in the rental home category.

Rental house owners can deduct the home insurance, mortgage interest and maintenance costs from their taxes. Depreciation can cause a nominal loss which can also be deducted.

Even with seasonal rentals, expenses can be deducted if the investor has lived in the property for 10% of the days they rented it. If that wasn’t enough, the 1031 exchange lets the investor sell the rental property or buy a similar one without any capital gains tax.

Investors can also add extra space such as a garage, basement, or pool house and write mortgage interest off as expenses. Although, this requires them to have the necessary information about local zoning rules.

Leveraging the Assets

Another reason investors prefer owning rental homes is that they leverage the value and cash flow. This leverage will result in a smoother loan approval process. They can use a small amount to put as a down payment and finance the remaining cost.

Looking to Invest in Rental Homes

At Insula Capital Group, we offer our clients private lending and hard money loans for real estate investment in NYC. Our clients get fast funding and a trouble-free application process. We offer hard money loans, private money loans for real estate investors, fix-and-flip loans, and much more.

Get in touch with us to find out more.