Starting out with rental property
I have been currently look for rental property in my area in Texas and due to high home vales it is hard to find a home that you have positive cash flow after mortgage payment, insurance & taxes without putting a large down payment down. Are the tax incentives enough or how do people get into the rental business?
Hi, Kyle. Thank you so much for your question! Tax incentives are available for rental property investors in the form of various tax deductions for depreciation, mortgage interest, insurance costs, and more. For more information on the tax benefits and deductions available for rental properties, check out our article here: https://fitsmallbusiness.com/rental-property-tax-benefits-deductions/
You can also learn more about the benefits of investing in real estate here: https://fitsmallbusiness.com/benefits-of-investing-in-real-estate/
Though the tax incentives can be substantial, the real estate rental business requires upfront expenses to purchase property and cover other costs like maintenance, insurance, taxes, and utilities. In general, you can get a loan to buy a rental property from traditional mortgage brokers, online brokers, and other sources. Visit our guide to financing rental property here: https://fitsmallbusiness.com/investment-property-loans/
If you’re ready to take the leap but aren’t sure where to start, we have also compiled a list of tips for buying your first rental property here: https://fitsmallbusiness.com/buying-your-first-rental-property-tips/
Best of luck,
Great idea to start investing with rental properties. I recommend that you start in an area that has a huge distressed market like Ohio and Illinois. In these areas you have more renters than owners. It’s more affordable to enter the market and more upside as far as income and capital gain.