Investing in real estate has made a comeback after the real estate crisis years ago, which seems like a distant memory in booming markets. Many people are rushing to buy properties, but worry about the risks involved in real estate investments. One worry is that the investment depends on other people, such as tenants and the neighborhood. A prospective investor may not be all that familiar with a certain location, although it seems like an attractive investment opportunity. One solution is to invest in owner occupied properties so the investor can actually live in his or her investment. This can provide oversight and reassurance, as well as tax advantages.
If you are buying several apartments in a building, living in one of them and renting out the rest, you are likely to attract responsible tenants. One reason is that people who want to get away with the kinds of things landlords hate—things that may compromise the value of their investment—do not want to live in the same building as their landlords. If your prospective tenants know you live there, they are likely to be on their best behavior and respect your property. Another advantage is that you get to know what is going on in the building and the neighborhood. Too many landlords are shocked when they come to see their properties from far away. Living in your property helps you keep tabs on it and to spot problems as they develop.
Fixing problems right away is essential to preventing permanent damage. Waiting to deal with a leaky roof may actually be dangerous, and your tenants may not be able to spot the signs as they develop. In addition, leaking water may cost you a lot of money, and if you live far away, you may not notice until you receive the bill. Owner occupied properties allow investors to avoid these nasty surprises.
There are numerous tax advantages to owner occupied properties. Any improvement you make to the building is something that benefits you, and you get to write it off on your taxes. In addition, you can deduct depreciation caused by reasonable wear and tear on rental property. Regarding property value, you can increase your investment’s worth by making repairs, while at the same time improving the quality of life for your own family.
The advantages provided by owner occupied properties are substantial. Living next door to your rental property is the best way to keep track of it and to make improvements that will increase the value of your entire investment.