What are the advantages of buying rental property?

[b0mbrman]

Hi there.

Welp, it's tax season again and I'm starting to look at things that could ease the burden next year.

A friend suggested I look into purchasing rental property. I have zero experience but it seems like a reasonable idea as the money coming in as rent should almost offset the monthly payments and I could write off mortgage payments as if I had a house for my own use.

Am I missing anything?

 

[Sluggo]

Find a few local people who do rent houses and pick their brains about your local market and their experiences.

It can be a HUGE freekin headache, from lousy renters to trashed properties to taking time out of your day to do the eviction process.

It can also be really lucrative venture if you have proper cash-flow from your properties, and a good cushion of money for taxes, repairs and months where the property is empty.

My in-laws have about 10 rentals as part of their retirement portfolio, and also something to keep them busy. It is 10x more work than they had imagined, but I think they enjoy it. It really is a part-time job keeping up with it.

 

[adelphi]

like tenants who don't pay their rent for 6 months, u spend a bundle to take them to court to have them evicted, and they pour cement down your toilet......the security deposit doesn't even begin to cover anything

 

[Kaieye]

My parents and eldest brother both owned rental properties when they were in their thirities. My father retired in his late fifties and my eldest brother retired in his late forties. I am planning to buy my first commercial property this spring and hope to retire before I reach sixty. I've seen late rents, problem tenants and broken roofs and plumbing but that is part of being a landlord.

One of my friends who graduated high school and never went to college was encouraged to purchase rental property in the early 1980's by his parents. He literally retired when he was 45 because of his financial planning but his wife told him to keep the catering business just to stay busy...

 

[Turkey22]

We were renting in a duplex with a small upstairs and nice downstairs and liked it so much it ended up being our first house. The payments are made mostly by the renters, some of the stuff you have to deal with is a headache, I think it was worse because we were first time homeowners. However be careful with who you rent to and things can work out very well. We've had a lot of help from my mom because she is a realitor though and has done rentals for a long time. Regardless of the headaches it has done alot for our financial future, we might have been permanent renters if we hadnt got this place. We'll see how our first year of taxes go... Last year I didnt withhold enough and had to drop a bit back in so hopefully this year will be a bit better.

Oh yeah there are certain benefits I believe on taxes with regards to homestead property so pure rentals are gonna cost you a bit more.