The Advantages Of Purchasing Owner Occupied Properties
Have you considered purchasing a residential rental property with multiple apartments or flats? Owner occupied properties are where the owners of rental properties live in one of the units, instead of renting the entire building. Owners of the property, tenants and neighborhoods all experience significant benefits from owner occupied rental properties.
Reduced Maintenance and Management Expenses
For owners who do not live in their rental properties, they may experience significantly higher management costs. These landlords often have to hire a management company, or pay a renter to be available to assist other tenants with maintenance problems. Owner occupied rental properties can have some, if not all, of the building’s maintenance needs addressed by the owner. Owners who live in their properties save money by avoiding the need to pay a third party to perform general maintenance and management tasks.
Improved Quality of Tenants
Noisy, destructive or criminal tenants can easily be reduced in owner occupied properties. These types of tenants can cause significant damage to the structure of a rental property while disturbing the community around them. Owners are often more selective about their tenants when they live in the same building. Renters who know they are likely to engage in un-neighborly behavior will often avoid apartments in the vicinity of a landlord or other supervisory individuals. In this way, landlords who live near their tenants improve the quality of life for entire neighborhoods.
Buildings age and often require significant maintenance. The costs associated with both of these can be a tax benefit in owner occupied properties. A portion of the value of a building can be claimed as a deduction against expenses associated with maintenance. This depreciation process can yield a significant annual tax savings that is unavailable to single-family homeowners.
The other major financial benefit for owners that occupy their rental buildings is that all rental expenses can be written off against rental income. If a sewer line breaks in a single-family residence, the costs of repairs can not be deducted from taxes. However, if an owner who occupies an apartment were to face a similar situation, any repair costs that apply to the tenant-occupied units could be written off.
Rental property investing can be very lucrative, and remains an excellent class of investment. Ongoing cash flow, significant tax benefits and capital growth are all opportunities with a good rental property. Living with tenants in your rental property is a prospect that has many advantages. If you are considering purchasing a rental property, remember to take owner occupied properties into account.