With more people renting now than at any point in the last 50 years, there’s never been a better time to invest in an investment property. Buying a property that can be rented takes some effort from a management standpoint, but it can be a lucrative investment. Purchasing an income property in Biltmore, AZ takes a little bit of know-how.
When you’re looking at investment property, you need to balance time and effort required for maintenance. If you buy a cheaper property, you could be inheriting problems. Paying more for your property could mean it will take longer to pay off.
If you want to invest in an income property for the first time, you need some help to make sure you don’t lose out on your first investment. Consider these 3 factors when you’re thinking about buying a Biltmore AZ income property.
1. Rental Income Is Complicated
While you might think that rental income is pure profit, you have to consider all of the angles before you start looking toward retirement.
If you charge a rent of $1,200 a month, you’re not looking at a full profit. Likely you’ll have to pay local taxes and fees. Subtract that monthly amount, let’s say $700, from your rent and you’ll have $500 left.
You need to take a portion of that $500 and save for maintenance costs. If a boiler or an air conditioning unit goes out, that could be up to you to replace. Make sure you’ve got a bank account designated specifically for these issues.
Be a good landlord and you’ll keep tenants around. Otherwise, you’ll have to deal with vacancies, which can cut into your profits.
2. Tenants Help With The Mortgage
If you purchased the property on a fixed-rate mortgage, you’ll be using your rental payments to pay it off. While you may wish to save some of the money you receive in rental fees, you might be better off paying off the mortgage. Since interest is calculated on the principal, the faster you pay it off, the sooner you’ll be able to see nothing but profit.
Find a figure that works for you and try hitting it every month. If you can dig into your principal while still paying interest, you’ll make more money from your property in the end.
3. You’ll Get Tax Write-Offs
Rental property owners get certain tax deductions. If you use credit cards to purchase items for the property, those purchases can be written off. Any interest paid can be written off as well.
If you have insurance, maintenance repairs, or legal fees, those can all be written off. Talk to your accountant and see what else you could be writing off from your Biltmore income property.
Income Property in Biltmore, AZ is a Great Investment
You could build wealth from your rental property if you crunch your numbers correctly. You’ll be able to pay for your own living expenses while building another asset. If you’re able to find a property with an additional unit that you could live in, you could be saving even more.
If you’re ready to start hunting for a property in Biltmore, contact us today for tips on how to find the perfect fit.
Are you ready to buy or sell property in the Biltmore, AZ area? Contact Thomas Osterman, a Biltmore real estate expert to get the most from your sale or purchase!
Call Thomas at (602) 466-1846 and enjoy a more personalized real estate experience.
Read Related Articles: