Owner Occupied Properties: Getting the Most Out of Your Investment
Real estate is one of the most popular types of investments, and with great reason. There’s always a need for housing, and the right tenants can generate a constant and reliable source of income. Owner occupied properties are one of the most beneficial types of rental properties for owners and tenants alike. Learn how to make the most of your property’s potential.
As long as you occupy the property in which you’re renting, you can write off your rental expenses against the income you receive from your tenants. Examples of rental expenses include upgrades and repairs made to the rental property. One thing to keep in mind with this is that only the portion of the expenses spent on the rental units can be declared, not the portion spent on your personal unit.
Better Pick of Tenants
Most tenants like to have a landlord who also lives on the property, mainly because it gives the landlord a perspective of the building that off-site landlords don’t have. Something else to think about is the fact that you’re likely to have better-behaved tenants; unruly renters are unlikely to blast loud music or disrespect other tenants if the landlord is only a few doors down.
Saving on the Cost of Management
Property owners who don’t live on-site often hire management companies to tend to the day-to-day aspects of operating a rental property. Owner occupied properties don’t require such services, and as such, you’re able to save on the cost of hiring a management company. If you’re handy, you might even be able to take care of maintenance and save some money there as well.
The Cost of Depreciation
Besides writing off rental expenses, you can also write off the depreciating value of your property, which can yield hundreds or possibly even thousands of dollars in savings every year. Just like with the rental expenses tax write-off, you’re only able to account for the depreciation of the portion of your property that your tenants inhabit.
Attracting the Right Tenants
While the above tips can help you to make the most of an owner occupied property, you have to put in the time and money to attract tenants who will want to remain with you throughout the years and ones who will be clamoring to move in. Know the type of tenant you want living in your units in order that you know the qualities to look for, effectively advertise the best parts about your property, keep your property in great shape inside and out, and thoroughly screen your tenants in order that you truly know the type of person living in your building.
When done right, owner occupied properties are practically an investment that pays for itself.