Ways to Profit from Owning Las Vegas Rental Property
Most people have experienced rental property from a tenant’s perspective, and almost all of those have daydreamed about being the landlord on the other end of their monthly rent check. Still, it’s a small minority who has actualized their daydreams by becoming owners of a Las Vegas rental property. Despite some additional expenses and landlord responsibilities, owning a Las Vegas rental property can be a savvy move for a brighter financial future. Here are seven ways you can profit from living the landlord dream:
Creating Cash Flow
Cash flow is the foundation on which wealth is built. In many cases, a Las Vegas rental property can generate cash flow by earning in rent an amount that exceeds the mortgage, carrying costs, and expenses paid by the landlord. Better still, Las Vegas rental properties can be a reliable, monthly source of cash flow.
Paying Off Your Mortgage
One of the smartest ways you can use cash flow is to pay off the mortgage on your Las Vegas rental property. For the first 15-20 years of owning a property, mortgages are the largest expense eating up the rent from your property. As soon as your mortgage is eliminated, profit from your Las Vegas rental property will drastically increase, as you get to keep the lion share of rent from your tenants.
Making Improvements
There are several ways to increase the value of your Las Vegas rental property, thereby increasing your net worth. The most proactive of these is improving the property. By choosing cost-effective home improvement projects, the value of your property can be increased independent of market fluctuations. A newly improved property is always more valuable than a run-down property!
Boosting Equity
Even if you make little changes to a property from the time you purchase it, the property’s equity value is likely to increase over time due to market inflation and supply-and-demand economics. This is especially true if you purchase a rental property in a hot location with lots of development.
Increasing Rent
Property improvements and market inflation is a powerful combination that can set you up to increase the rental rate of your property. When you increase your rental rate, you are able to pay off your mortgage sooner and, if you choose to do so, continue to improve the property. Your property’s value will then increase, and you may consider increasing rent again. This can create a profitable financial cycle for you as the owner of rental property.
Tax Benefits
Owning a Las Vegas rental property entitles you to tax deductions for depreciation, rental expenses, and mortgage interest. A good accountant can help you maximize these benefits.
Re-Investing Profit
Real estate tycoons do not own just one rental property. Instead, they re-invest the profit and knowledge they gained from their first rental property into more and more properties. Their cash flow and net worth snowball.
Becoming a successful Las Vegas rental property owner may seem daunting at first, but the odds of turning a profit are actually in your favor. By keeping a few, simple guidelines in mind, you can maximize the potential of your rental property. You can become part of the minority of people who have realized their dreams of profiting from rent rather than paying rent. In doing so, you can take control of your financial future.