Why Investors Should Consider Owner Occupied Properties

Homes in crowded urban areas have, in recent years, been undergoing a change in which the home itself is split into different apartments and flats to accommodate more people. There’s also been a trend in which the owners of the rental properties continue to occupy the house in question in one of the separate apartments. While this might seem like it could cut into potential profits, there are some serious benefits that any investor can experience when making the decision to use owner occupied properties. Some of these include:

Better Tenants

No one wants to have bad neighbors, and owner occupied properties solves this issue. When owners occupy the properties they’re renting out, they’re more likely to be selective about the people they allow to rent out their other apartments. Therefore, these tenants are less likely to be destructive or draw other types of complaints that could come back to bite investors. This also limits potential criminal behavior on the premises.

Lower Costs

Management and maintenance costs can claim a huge portion of an investor’s and owner’s time and money. However, owner occupied properties can lower these costs in the long run. Because the owner lives on the premises, there’s no need to hire a management company. This fact alone can save investors almost 10 percent of their usual annual expenses. The owners on the premises will also handle most of the maintenance needs, which saves the cash that’d otherwise be spent on hiring a professional to get the job done.

Tax Time

Being able to write off ownership expenses can make a huge difference for investors when tax time rolls around. Owners of the building are able to write off all of their own rental expenses against their rental income. This includes repairs that impact any of the occupied apartments that aren’t occupied by the owner themselves. Therefore, if the water is broken in three of five apartments including that of the owner, the owner will then be able to write off two thirds of the overall repair expense when it comes to filing taxes.

Resident owners can also write off the depreciation of the building on the portions of the housing occupied by tenants. This can be used as a deduction against expenses each year, and simulates the aging of the building in question. This can generate hundreds or thousands of dollars each year in savings.

These are some of the main benefits of investing in owner occupied properties. With these and other advantages available to parties everywhere, this may just be the smartest way to rent properties in the current market.

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