Exploring the pros and cons of renting out your primary residence.
Should you sell your home or turn it into a rental property? This is an exciting thought, as there are fantastic pros to converting your primary residence into a rental. For example, you’ll have a steady stream of passive income, and you can use that to invest in other areas. Also, rental rates have been rising in the Phoenix area for the last few years, so you might be able to make more money from your rental than you think.
There are also many tax benefits to owning a rental. The most important one is the depreciation expense. This is an exemption from general wear and tear, and it could make all your rental income tax-free, which is very exciting. If you’d like to learn more about how this exemption works, you can reach out to me, your lender, or maybe your accountant.
On the other side, there are a few cons involved with owning a rental. One is that you’ll have to hire a property manager, which is another expense. Also, you’ll forfeit your ability to be exempt from the capital gains.
If this is something you’re considering, call or email me. I’d love to walk you through all of the pros and cons so we can figure out what’s best for you and your family.