As we look forward to all 2019 has to offer, you may be wondering how you can generate more income without having to put in more hours away from your precious loved ones. The stock market has been extremely volatile in 2018, so putting your money in a different asset class could be a great idea.
Buying real estate may be the perfect answer. Here are 10 reasons that buying real estate as an investment makes great sense.
Earn Passive Income
When you hire a professional Airbnb property management company to handle your property, owning real estate requires very little activity on your part. Yet, it continually generates income for you and your family. While you are enjoying time with your family, another family is enjoying time with theirs at your property.
Adds Stability to Your Portfolio
The stock market is full of uncertainty, so your net worth may bounce up and down like a basketball being dribbled. Adding real estate to your portfolio helps ensure a level of stability. There have been many periods in the United States history when the value of a real estate investment grew year-over-year. That scenario has not been true of many other investments. At the same time, putting all your investment money into one type of investment is often not a good idea. Investing in different cities also helps keep your portfolio stable. Manorshare offers property management services in Arizona (Phoenix and Prescott), Auston, Chicago, Las Vegas, Seattle, Washington DC, and are always expanding.
Depend on Market Cycles
Working with a professional team allows you to understand which areas of the world are best for real estate investment at the moment. After all, you want to buy low and sell high. We can help you identify markets where there is more of a demand for Airbnb properties and set up the process of allowing our professional team to manage them for you.
Count on Leverage to Maximize Returns
It is relatively easy for most people to borrow money to buy real estate. Then, you can further use leverage when you use your Airbnb payments to pay down your mortgage. Finally, since most real estate properties grow in value over time, you have a tangible asset that is consistently growing in value.
Tax Advantages for short term rentals
While you should always consult a tax professional about your specific circumstances, there may be tax benefits to owning an Airbnb property. These include being able to:
Deduct an amount equal to 20 percent of your net rental income as a business pass-through tax
Deduct for fire systems, security systems, roofs, and HVAC used personally
Deduct 100 percent of the cost of appliances and furniture placed in a short-term rental
Deduct all mortgage interest payments as a business expense
Deduct interest on credit cards and personal loans made to do repairs or upgrade your property
Deduct your property taxes
Deduct the cost of property insurance
Deduct the cost of fees paid to a vacation listing service
Deduct any expenses incurred while traveling to conduct business
Deduct home office expenses if appropriate
Increase Cash Flow
As you pay down and finally off your mortgage, then you have more cash available for other things. You may choose to invest it in additional property. On the other hand, you may choose to use it to meet your living expenses allowing you to work less. Remember that paying even one extra mortgage payment a year can shave years off the end of your mortgage allowing you to invest sooner or retire at an earlier age.
Provides a Renewable Source of Credit
As you pay off your mortgage or your vacation property increases in value, you may be building up credit in your investment. You can often borrow against this value allowing you to make other investments. Then, as you pay it off again, you can use it again and again.
When you use Airbnb property management, you eliminate the hassles of owning a vacation property. Yet, you still retain complete control allowing you to buy, sell or do whatever you want with your property.
Build Your Credit
As you use your income from the vacation property to pay your mortgage off on time, you are building your credit. This often results in lower interest payments on other loans. It may also increase the chance of getting more credit for allowing you to do other things in your life.
Over a period of time as your great reviews and prices in the area where the vacation property is rented rise, you can charge guests more. This allows you to beat inflation.
There are many reasons that Airbnb properties may make great investments. Contact our Airbnb property management company to learn more details.