Rental properties are the best way to create true wealth.
When an investor purchases rental properties they are not only helping a family but he or she also has many benefits in addition to their monthly positive rental income or cash flow. The first one and most important one is that the tenant pays for the landlord’s mortgage. Each month, the landlord makes the same payment to the bank assuming they have a loan while the tenant pays their respective rent. This lowers the principal amount month after month and increases the owner’s equity. In 30 years (a normal mortgage time frame) the property will be paid off, the owner will have a free and clear property and it can still be rented bringing even more income. The second benefit is that that the properties appreciate in value in average of 7 to 10 percent per year. Lastly, owning rental properties has the ability to give your business a tax deduction for depreciation expense that can be used up to 27 years straight. These are just some of the amazing benefits for owning rental properties!