Buying rental property to create a positive stream of income and long-term capital appreciation in today’s marketplace has not been more favorable, unless you jumped in and purchased the property at the bottom of the 2008 Recession. And, the tax code is stacked in favor of real estate ownership even beyond home ownership.
The positive point of investing in our current market continues with mortgage interest rates in the range of 3.75% – 4.25% and, locked in at those low rates for 30 years.
Even if there was a slight inflation you could continue to pay off current debt with future dollars. Low fixed rate debt secured by real property is the best possible protection against inflation, since the market value of your property and the rent you can charge can increase in conjunction with other prices at lease renewal time, while your major expenses can remain level.
Mortgage interest, insurance and all of the other rental property expenses are deductible against its income. (Consult a tax professional)
Beach, desert or mountain resort properties are often rented as seasonal. If so, you can use it yourself for two weeks without jeopardizing the deductibility of the expenses.
If you have a garage apartment or a mother-in-law apartment, this can be considered a rental property.
In a 1031 Exchange, you can sell a rental property and invest in another of “like kind” without paying capital gains taxes.
There’s always a risk in any investment. Consult your Realtor and your tax professional as each person’s financial obligations vary.