Coeur d’Alene Rental Property Investing Investing Versus the Stock Market

A reason people may object to Coeur d’Alene rental property investing because they believe that it will take up too much of their time and will therefore produce lower net returns than investing in stocks would. However the most savvy investors are putting monies in rental properties – why is that? There are four benefits to Coeur d’Alene rental property investing, while stocks only give some of those benefits.

Income is a big advantage that Coeur d’Alene rental property investing have over stock investments. Since income is the left over after expenses and debts are paid it may seem not as rewarding because of the immediate costs of real estate, there will be remodels, updates, or general fixes before the house is able to be rented. On the other side Rental properties offer a reasonably dependable monthly income or “cash flow” that most stocks do not offer.

Coeur d’Alene rental property investing uses leverage, or a loan against the initial purchase of the property, to put a portion of the monthly mortgage payment toward two things: to pay the interest and to go toward the equity. For anyone who owns a home, this should seem like familiar territory. However, there is a twist in that the mortgage payment is being paid off for you. The tenant is paying off your house. Thinking in regards to this, puts the long term investment in your hands and is promising as apposed to stocks.

Another upside to Coeur d’Alene rental property investing is tax benefits. Owning a rental is one of the most powerful tax benefits that you can get. Even if you are making money, depreciation on the property allows you to claim a loss. This is a benefit that is useful for the earlier years of acquiring your property. You can use a 1031 exchange when you want to sell the property. Thereafter you have a benefit buying a different property without paying any tax on capital gains. Now the cycle starts and you are rewarded and it becomes easier and cheaper for you. Now of course we do not recommend you do this on your own, but rather with the right guidance and accountant.

Appreciation is  yet another benefit to Coeur d’Alene rental property investing; when you can sell an asset and make back more money than you paid for it. This is also the reason we invest in the stock market. However, many people don’t think that will happen with real estate, which isn’t true. Real estate will appreciate as the real estate market continues to inflate. This does come with some attention to the market, but the reasourceful investors definitely makes it in the case of buying and selling rentals.

But isn’t real estate a lot more work than stocks?

One apprehension to joining the business of Coeur d’Alene rental property investing is the work involved. The taking care of all the logistics of a property and rental management, which absolutely it is more work than the stock market. You will have to do the maintenance and answer all the many calls your tenant will make. But this doesn’t mean that has to be you. You can hire a professional property manager to do aspects for you. You could imagine the property manager as your stock broker. Even once you pay manager fees, with a good management company, you will be seeing income. This is because a property management company will make your tenants happier so they stay longer, cut down on vacancy time, resolve problems quickly, and even work to get you the best maintenance costs.

Would you like to learn more about our Coeur d’Alene property management services? Please contact us for more information.