Income Properties - Double Trouble or Two Times the Success?

As you know, buying or selling a house is one of the biggest financial decisions most people will ever make. Getting the best bargain in the purchase or making the most profit on the sale give buyers and sellers so much to think about that many may never stop to consider keeping that old house – or buying another – as an income-generating property. But the rewards, in savings, profits and problem-solving, can be high.

One option for buyers who otherwise might consider home prices beyond their reach is the property that pays for itself: a house you live in part of and rent the rest of. This offers not only an obvious balance of cost and income, but perhaps lesser-known benefits in taxes and mortgage. The rental units can be depreciated over time; considered to offset the rental income, this can lower your taxes on that income. At the same time, the rent's addition to your finances helps you qualify for a larger mortgage. Of course you'll want to decide if the demands of being a live-in landlord are for you (and find out if rent-control laws in your area might limit the return on your investment).

If being an offsite landlord is more appealing, you could always keep your current home as a rental after you move into the new one. Your long-tern familiarity with the home's features and condition could lend a certain confidence both to yourself and your potential tenants. As with any investment property, you'll first want to calculate whether the rental income will cover the current expenses. Of course being a long-distance landlord has its headaches too, so you have to enjoy the challenge and be ready to meet the needs.

Owning an income-generating property is not for everyone, but – from younger buyers offsetting their purchase costs, to seniors easing the expenses of their retirement years – it can be for all kinds of people. I would be happy to talk to you about whether or not a rental property would be double trouble or two times the success.