Ever Thought Of Being a Landlord? 4 Reasons and Tips for Investing in a Second Property
Investing in a second property has a number of advantages. You’ll get regular monthly income
from tenants, plus there are additional tax benefits. Being a landlord isn’t always easy, but if
you’re prepared for what it takes, a second property could be your best investment yet. Take a
look at why you should invest in a second property, and tips for making it happen!
2 Reasons Why You Should Buy Another Property
1. You Get Tax Advantages
When you own a second home, you pay less tax. You can deduct certain expenses from your
income, which lowers the tax you owe. You get to deduct items such as mortgage interest,
property taxes, insurance, maintenance/upgrades, property management and utility bills. Paying
less tax is always ideal.
2. Regular Monthly Income
One of the major reasons most people buy a second property is to rent it out. This means you’ll
be getting regular monthly income from tenants who are paying to stay in your place. This
income is predictable and you know you’re going to get it every month, which is appealing to
Tips for Buying a Second Property
1. Research is Key
Make sure to put just as much research into a rental property as you would into buying a
property for yourself. Look at locations in terms of schools, recreational resources, shopping,
You want your home to be in an appealing location for renters, as well as being an attractive
home itself. You’ll also want to read up on market specifics, zoning laws and renting and buying
trends in the neighbourhoods you’re looking at. It’s also important to know what tenants in that
area look for in a rental so you can make sure your place has a competitive edge.
2. Make Sure It Makes Sense Financially
Rental prices have gone up, but buying prices have skyrocketed as well. Analyze your monthly
housing costs with an app or online mortgage calculator. This will allow you to enter your
purchase price, down payment, taxes, insurance and mortgage loan interest rate, so you can
figure out your costs.
You’ll also want to take into account maintenance and repairs, which you can estimate will cost
about 1% of the purchase price per year. So if you bought a home for $500,000, it will cost
about $5,000 to maintain per year.
If you’re considering buying a second property as an investment property and/or an avenue of
income, make sure to get in touch with legal and tax professionals to help you through the
process and confirm whether it makes sense for you.
What It Takes To Be a Landlord
If you rent out your second property, it means you’ll be a landlord, and this comes with added
time and energy. You need to keep yourself up to date on rental laws, and you must make sure
your property is safe and inhabitable for your tenants.
Whenever your tenant has a problem, they’ll expect a near-instant response from you,
especially if they’re paying good money to rent your place. You’ll find being able to do minor
repairs yourself quite beneficial and will save you from dealing with repair people. You’ll have to
deal with collecting rent and if you have delinquent tenants, you’re responsible for keeping them
on track. Being a landlord isn’t easy, but the benefits can outweigh the costs.
Taking all this into consideration, you can make a decision on where investing in a second
property is the right move for you! Get in touch with us at askNina if you’re looking to invest in a