5 Reasons to Buy An Investment Property Instead of Your Own Home
“When are you going to stop renting and buy?” The plaintive refrain of Boomer parents everywhere.
They’re not entirely wrong. Real estate is a good investment … But does it have to be your home?
Homeownership isn’t right for every person every time. For Millennials and Zoomers who aren’t ready to put down roots, let me make a measured case for investing in real estate by … you know, actually investing in real estate, rather than buying a home.
Here are five reasons to consider buying an investment property instead of buying your own home …
1. You Don’t Have to Live In It
People tend to “buy as much house as they can afford” — fancy finish-outs, more space than they need, etc. — because they get emotionally attached to the idea of “home.” They don’t want to live in a dump. Plus, when you buy your own home, your selection is limited to the houses close to where you live and work.
With an investment property, you can focus on the economics of the investment, not what it would be like to live there. Plus, you have the entire country — in fact, the entire world — to choose the best deal from.
2. It’s Often Cheaper
Yes, your mortgage payment may be lower, but add on property taxes, insurance, PMI, repairs … plus there’s always the temptation to add a jacuzzi or a new deck … and then the water heater breaks. Homeowners usually end up spending more out-of-pocket.
On the contrary, a nice rental property in a nice area tends to be cheaper out-of-pocket. Yes, you’re “throwing away money on rent,” but when you own a home you also throw away money on property taxes, insurance, PMI, repairs, and mortgage interest (which is the lion’s share of your mortgage payment early on). With an investment property, you’re still building equity … and collecting rent in the process!
3. Less Stress
When you own a home, everything that breaks is your responsibility to fix. When you rent, it’s your landlord’s responsibility.
Yes, as a landlord yourself, you are responsible for repairs on your investment property … but you can hire a handyman or — better yet — a property manager to take those 2am broken-toilet calls for you!
4. Tax Advantages
As a landlord, you get most of the tax advantages of homeownership … plus a few extras. For example, you can write off your expenses and even write off the depreciation of the asset. What is depreciation? Read more here!
5. Your Lifestyle Can Remain Flexible
Maybe you expect to change jobs or would like to try a different city. Maybe you would love to live abroad. Maybe you just don’t know what the next few years have in store and you like to keep your options open.
It’s easy to walk away from a rental, but hard to walk away from a home you own. You can’t put a price on the freedom of renting. If you own an investment property, you get to have the best of both worlds — build equity, and enjoy your freedom.
Finding the perfect investment property doesn’t have to be a chore. Martel Turnkey helps investors of all budgets — even out-of-state investors — find turnkey properties in the robust rental markets of Cleveland, Memphis, St. Louis, and Detroit. If you’re even thinking of investing instead of committing to homeownership, give us a call!