Reasons to Own a Rental Property in Orange County
As you progress through life, you have to make plans for the future. At one point your future plans may have been buying a home and starting a family. But as you reach those goals and build the life you want for yourself, you have to make new plans. Planning for the later years of your life and even retirement is one of the smartest things you can do for you and your family. One of the best investments you can make is purchasing a rental property, and more specifically, purchasing a rental property in Orange County. If you’ve been thinking about what you can do to set yourself up for a bright future, diversifying your investment portfolio with an investment property comes with many benefits.
3 Fantastic Benefits of Owning a Rental Property
When you head into the later stages of life, you have to start planning for your future. One thing to consider is how you’ll generate income after you have retired or as you are scaling back on your career. Even if you are in the earlier stages of life, planning for your future is always beneficial. If you purchase a rental property, that can enable you to generate additional income for yourself and your family. Having a property that’s generating passive income, or income that you don’t have to put in maximal effort for, allows you to save and live the life you want to live as you age.
The key to making additional income is making sure your monthly rental expenses don’t exceed your monthly rental income. Figure out what dollar amount you want to make monthly off of your rental property, and charge accordingly based on the area. Cities like Huntington Beach, Irvine and Orange are all reaching renter majority’s, meaning that renters outnumber homeowners. If this trend continues in the Orange County area, it just reiterates how smart of an investment a rental property is.
This is the most obvious perk of owning a rental property. If you buy in a desirable area, a rental allows you to sell the property down the line for more than you purchased it for. Typically, it takes 10 years for you to hold on to a property for it to appreciate. Keep in mind that some markets are going to appreciate more than others based on conditions in that particular market. Properties are appreciating all over Orange County, as its one of the most desirable places to live in all of California.
Tax Write Offs
When you’re diversifying your investment portfolio with a rental property, one of the biggest advantages is the tax write offs that come with it. There are quite a few that rental property owners get to take advantage of, like the following:
· Landlords can deduct a bonus depreciation deduction for the first year of owning a rental property. Ironically, the IRS deems rental properties depreciating assets. Under the old tax plan, you were only able to deduct up to 50 percent of the property’s value in the first year but under the new tax plan, you’re able to deduct 100 percent of the property value.
· Mortgage interest, property tax, operating expenses and repairs are also deductions you can take when you own a rental property.
· Deduct the costs of certain materials, supplies and repairs to keep your property in good working condition, but not the improvements themselves.
Purchase a Rental Property in Orange County
If and when you decide that purchasing a rental property is in your best interest, you’re going to want to work with a realtor that can find you a topnotch investment. An experienced realtor will know the hotspots in Orange County, and be able to pick out a property that is as move-in ready as possible so you can start maximizing your investment. Rosemary has been helping clients all over Orange County generate passive income for themselves as they move into retirement and beyond. Contact Rosemary today so she can do the same for you.
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