Converting Your House Into A Rental Property

Reported by the American Association of Realtors, the average U S citizens invest 7 houses throughout their life. Personally, those are 7 houses that we should hold onto for the rest of our lives, to come up with monthly revenue and long-term financial security for our families.

The typical method that we follow is to sell the home that we dwell in and to use the funds from the sale to purchase a brand new house. What I recommend is to utilize the latest process. If we twist the old procedure just a bit, it may end up in a tremendous difference in our net worth and our economic security.

I propose that instead of selling your property, just refinance it, and employ the cash from the refinance as an installment on your next house. Now, you possess two houses and you may just turn your old home into a rental house. It’s almost as easy as 1 2 3.

The 3 steps to turn your home into a rental house

1.) Refinance your residence.

2.) Make use of the refinance money as a down payment to purchase a brand new house.

3.) Move into the new house and rent out the old house.

The two instant advantages of turning your home into a rental house

1. You have a new source of income flowing in, in the form of rental checks. This earnings gives a fresh layer of security because it does not depend on you working regular hours, also it continues to flow regardless of whether you lose your regular job.

2. Formerly, you had just one house, which was increasing in value an average of 5% each year. For example, a $200,000 house would increase in value to $300,000 over 10 years, for a return of $100,000. When you own two houses, your revenue would increase to $200,000 in ten years.

Like having an additional allowance without retiring – only better!

Possessing rental houses far exceeds the benefit of the pension that you receive from the job. I worked for the state of Arizona for 13 years, and I will, at some point, get a pension of around $1,000 a month. But guess what? Each year the worth of my annuity will sink since it is just not attached to inflation. So, after 10 years, I’ll still receive $1,000 a month but because of inflation, it could be in fact only worth $100 dollars a month because the price of my groceries, my clothes, medical, and other costs have all gone up each year.

Rental houses provide a better pension. If I purchase $1,000 a month in rent income, it not only keeps up with inflation, but it surely surpass inflation. Which pension program would your rather have? One, which increases in value with the passing years, or one that decreases in cost?

Why didn’t I turn my home into a rental house a long time ago?

Even if you purchase just one rental property throughout the course of your whole life, your economic picture will soon get better. You will wonder, as I did, “why didn’t I do this a very long time ago?

Another great article by Toronto Condominiums

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