Owner Occupied Rentals: The Real Advantages

By Provident Commercial Capital February 8, 2018 No Comments

Investing in real estate is a surefire way to see some amazing results from your money. This, of course, is only true if you know what you are getting into. It can sometimes be difficult to determine which properties are going to yield you the best return on your investment. One interesting opportunity to explore is with owner occupied real estate. There are many benefits that come along with this type of investment.

A building in this category is one that has the owner of the property living on the property itself. Often, these buildings will be split homes that allow for one or two other tenants. There are plenty of advantages that come along with having the owner right there. For one, you can be sure that only the best tenants will be admitted into the building. The owner is not going to want to deal with loud or destructive people living right next door, and will have a more complex screening process for applicants. This works for you as an investor because you will not have to worry about sinking money into a building where you will constantly need to clean up after bad tenants.

In addition to being able to screen tenants more efficiently, owner occupied property tends to require less of a budget for maintenance. Often, when a management company owns a building, the general repair responsibilities will fall on someone who is hired for the position. On average, this person is an independent contractor, or is employed by the management company, and will require the right amount of pay. When the owner lives in the building, however, he or she generally will assume the role of superintendent. This means that you, as an investor, will not have to worry about too much money being wasted on getting minor damages fixed in an efficient way.

There are also several advantages that can come into play during tax time. The owner of the building is able to write off a great deal of expenses related to the building in one of two ways. First, he or she can write off specific amounts that are related to the unit that he or she resides within. Second, any depreciations that occur in units occupied by other tenants can be written off as well. These depreciations tend to save hundreds, if not thousands, of dollars on taxes each year. As an investor, this means some great things for your finances.

The next time you are looking to make an investment, consider looking into owner occupied properties. You might be pleasantly surprised with what you discover.

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