Over the last few years, property values have seen unprecedented growth in the state of Idaho. Since 2011, home values have increased 149% alone. Not only has the market increased the price of home purchases, but so has it made finding rental options in the city of Idaho Falls, Idaho harder than ever before. In eastern Idaho in particular, rental property shortage has hit all time highs. For those who’ve pondered the idea of investing in real estate ventures, the time couldn’t be more promising. Here are a few factors to consider when making the change from renter, to property owner.
You’re In Charge
Making the proprietary decision to invest in the housing market provides newfound freedom to take charge of your dollar spent. You decide what property to invest in; you decide how best to manage it. This includes who you rent to, how much you’ll charge, and how you’ll choose to structure your rental agreements. Anything from single family homes, apartment complexes, offices, or Airbnbs are all potential assets in the current market for the right investor.
“Spend money to make money” means everything in the world of real estate investment. With a properly managed and maintained rental unit with the right renters, cash flow is guaranteed every month. You’ll make profit on top of paying off your mortgage, or have the liquid finances to tackle the necessary face-lifts the property requires. This equally builds equity into your property, adding more bang for your buck in the long run, and additionally increases property values in your vicinity over time. Once the property is paid off, that cash flow makes its way directly back to you as pure profit.
Investment properties receive tax breaks each year, giving even more potential to earn big on rental investments. The IRS allows deductions and write-offs through mortgage interest, depreciation, property taxes, maintenance, and extraneous expenses. Keeping documented finances and deducting costs of operating your rental unit falls under a business expense, providing added write-offs and extra money back on tax returns. The following examples all fall under common deductibles for rental property owners:
Cost of advertising property
Cost of screening tenants
Things included in rent such as:
Utilities, sewer, water services, wifi, garbage collection
As higher volumes of individuals relocate from high-cost living environments to the moderate, market fluctuations will inevitably rise and fall with the territory. Knowing these fluctuations can determine when and why to consider investing in real estate in your area. However you decide to approach these historic market values, making the change from renter to property owner can be a lucrative and freeing investment if handled appropriately.