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Murfreesboro Rental Property Investing vs. the Stock Market

murfreesboro rental property investor sitting in front of computer

Some people avoid Murfreesboro rental property investing by mistake

They think it will take up too much of their time and it might have less returns than stocks. But savvy investors know there are many benefits to rental property investing, especially in the Murfreesboro TN and surrounding areas like Smyrna, LaVergne, and Nolensville. Here are some big benefits of Murfreesboro rental property investing in Tennessee:

  1. Income is a big advantage that real estate investments have over stock investments. Income is defined as the profit that is left over after any other debts and expenses have been paid, so in this case that would be any remodels, updates, or general fixes before the house is able to be rented. Rental properties offer monthly income or “cash flow” that most stocks do not offer.
  2. Tennessee rental property investing uses leverage, or a loan against the initial purchase of the property, to put a portion of the monthly mortgage payment toward two things: to pay the interest and to go toward the equity. For anyone who owns a home, this should seem like familiar territory. However, there is a twist in that the mortgage payment isn’t coming out of your pocket, but rather the tenant is essentially buying the building for you. When was the last time someone offered to buy stock for you?
  3. The greatest benefit is that you get tax benefits as well. Owning a rental is one of the most powerful tax benefits that you can get. Even if you are making money, depreciation on the property allows you to claim a loss. Over time, this will fade slowly, but then you can do something else to help with your taxes. You can use a 1031 exchange when you want to sell the property. After that, you can buy a different one without paying any tax on capital gains. Then you can start the process all over again. Now, of course, we do not recommend you do this on your own, but rather with the right guidance and accountant.
  4. It’s a common term, but appreciation is when you can sell an asset and make back more money than you paid for it. It is the reason people buy into the stock market. This can also occur in real estate. Real estate will appreciate as the real estate market continues to inflate. The economy is always fluctuating (as is the stock market), and savvy investors can make a lot of money by buying and selling at the right time.

 

But isn’t real estate a lot more work than stocks?

 

If you are paying for the property and taking care of it, then yes, it is more work. You will have to do the maintenance and answer every call your tenant has. But it doesn’t have to be that way. Professional property managers take care of all this. Think of a property manager as your stockbroker. With the right company, even once you pay management fees, you will be seeing income. This is because a property management company will make your tenants happier so they stay longer, cut down on vacancy time, resolve problems quickly, and even work to get you the best maintenance costs.

Would you like to learn more about our Murfreesboro rental property investing and our area property management services? Call Real Property Management Rental Solutions at 615-900-4067 and we’d be happy to answer all your questions!