Managing Your Rental Property

Owning rental property is one of the most cost-effective means of building real wealth. Nevertheless, many people fall into the "land lording trap" and find managing property to be overwhelming. If you currently own rental property and are considering getting out of the rental business, Team Aguilar would like to help you rethink your decision.

At Team Aguilar, we enable our clients to escape the "land lording trap" by providing viable solutions to traditional property management. Our unique approach to "property management" allows our clients to retain all of the benefits of renting property - with none of the hassles!

Management issues aside, there are powerful financial incentives to maintaining your rental property. Consider this: A typical $200,000 house might require annual mortgage payments of $12,000 per year. A six-percent annual appreciation rate for said house would increase its value by $12,000 per year. So in terms of net worth, you would own this rental property for free! And that doesn't even count the increasing equity derived through your payments over time.

Furthermore, you can deduct the mortgage interest and various other expenses from your taxes; in a 25% tax bracket, that would net about $3000 in the early years. You must also consider that you could be receiving rental income ranging from $6,000 to $18,000 per year on this property. Effectively, you could earn between $9,000 and $21,000 annually by continuing to rent your property!

But managing rental property does consume time and resources. So you must ask yourself, "Is it worth the expense?" Team Aguilar believes it is.

Let us explain. Consider that if you earned the average salary of about $650 per week, you'd have to spend between 11 and 25 hours per week maintaining your rental property before it cost you more than it earned you. You probably don't spend nearly that amount of time managing your property, so you're already getting ahead!

You must also consider the downside of selling a rental property you already own. If you purchased the property several years ago, you might stand a chance of making a profit on your sale. However, that would bring to an end considerable residual income as well as substantial tax deductions worth approximately $300 per month on a $200,000 house!

Fortunately, you don't have to choose between the extra income you need and the free time otherwise required to manage a rental property. Team Aguilar has a team of experts that will relieve you of the burdens of managing your property. And we guarantee that you'll receive regular income from your rental property every month.

Have a question? Comment?