A short drive through Columbus North is enough to let anyone know about the great real estate to be found in this community. Columbus Ohio real estate is some of the best in the Midwest, and there are some opportunities for investment that a person may wish to consider. A traditional form of investing in real estate is putting money down on rental property. This old-fashioned way of making a profit through real estate does have some very appealing features.
The first is being able to get a steady stream of money. A landlord can receive a monthly income from rental properties that come in once a month. Of course all of the expenses involving rental property should be factored into the rent, but still there is a net amount above and beyond those costs. If a person has enough real estate rental property that person could actually use the rent as the primary source of income.
There are some tax advantages. This includes writing off interest on the mortgage or any expenses related to the property. Moreover, you are allowed to depreciate the purchase price of the property based on a fixed schedule. This is in spite of the fact that your rental property is appreciating in value at the same time.
The value appreciation is something that can make rental property almost irresistible. As an investor, you are putting in a certain amount of money for the purchase of the rental property; the bank supplies the rest. This is the same for any person buying a house, but with a subtle difference. You may have invested $15,000 on a $150,000 property, using a $135,000 bank loan for the balance. The appreciation of value is on the property and not the amount of your investment. In other words, assuming a 4% annual appreciation, your rental property has grown by $6,000 or 40% of the original amount you personally invested. This is leveraging an asset and will create a sizable investment profit over time. Your loan debt by the way is being paid thanks to the monthly rent.
You should keep in mind the responsibilities a landlord takes on. After the initial investment, you may have to do renovation on the property. That has a tax advantage, but you are still putting up money and/or sweat equity to make the property livable. Most tenants are honest and reliable people. Unfortunately, some are not at all and may be delinquent on paying rent continuously. On top of that, they may ultimately leave without paying the rent and trash the property as they depart. You are then stuck with possible repairs as well as rent not paid. Ohio has tenant/landlord provisions written into the Ohio Revised Code. There are obligations under the law that a landlord must fulfill. Serving the eviction on an unruly tenant may not be as easy as you might think. Even if everything is working perfectly fine, there are the day-to-day maintenance concerns with having a rental property. The HVAC system has to be maintained properly, because of this fails you will be looking at a very sizable cost to repair it.
These shouldn’t frighten you from investing in rental property but should make you aware of the responsibility. It is not a good idea to behave like an absentee landlord. Although there are rental management companies that can offer support, you have to look at rental property as a working investment. You have to stay on top of things to make this profitable. Real estate market conditions can be fickle. If you are investing with the intention of selling later, you have to keep your eye on the trends. Having a knowledgeable accountant help you with the finances and the taxes is perhaps the smartest decision you can make as a rental property investor.
Being aware of the cautionary notes is simply a part of being a conscientious business person. Rental property is not just something for senior citizens looking to get retirement income. Younger people can definitely enter into this type of investment, and do quite well in the process. Columbus has always been a city with opportunity written all over its face. There are properties that can be rented which you might want to look at. These can be a very worthwhile part of your investment portfolio.