9 Advantages to Owning a Rental Property

Many people do quite well for themselves by investing in real estate -- specifically, by owning rental properties. Holding rental properties isn't for everyone. But here's how it might benefit you.

5 Stocks Under $49

Presented by Motley Fool Stock Advisor

We hear it over and over from investors, "I wish I had bought Amazon or Netflix when they were first recommended by The Motley Fool. I'd be sitting on a gold mine!" It's true, but we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Click here to learn how you can grab a copy of "5 Growth Stocks Under $49" for FREE for a limited time only.

If you buy a rental property in the right market, you may find it easy to keep it occupied. The result? Steady rental income you can rely on. Even if you opt to rent your home short-term, you might still find that it serves as a solid source of passive income.

ALSO READ: How to Generate $1,000+ in Passive Income Each Month

When you own a rental property, certain costs you incur are tax-deductible. Those could help offset your IRS bill and help you maximize your profits. That said, it's a good idea to sit down with a tax professional once you purchase a rental property, so you can strategize on how to benefit.

Homes have a tendency to appreciate in value over time. If you hold your rental property for many years, you might be able to sell it at a nice profit. And that money could do a lot for you, such as help fund your retirement or allow you to meet other goals.

When you own a home, you have equity in it and have the option to borrow against it. If a need for money arises, you can take out a home equity loan or line of credit to access the cash you need. Often, that's a fairly affordable way to borrow.

ALSO READ: Best Home Equity Loan Lenders for 2022

Owning a rental home means having yet another asset to your name. That could help you feel more secure financially during times when other investments of yours take a hit. Plus, that rental property can serve as your financial backup plan -- meaning you can sell it if your financial situation goes south.

5 Stocks Under $49

Presented by Motley Fool Stock Advisor

We hear it over and over from investors, "I wish I had bought Amazon or Netflix when they were first recommended by The Motley Fool. I'd be sitting on a gold mine!" It's true, but we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Click here to learn how you can grab a copy of "5 Growth Stocks Under $49" for FREE for a limited time only.

If you have a short-term rental, you don't have to fill it with tenants all the time. Rather, you can choose to use that space for your own benefit when you're ready for an escape from the grind. If you own a rental near a beach, lake, or other desirable areas, it can serve as your personal getaway when you want it to.

Right now, stocks are down, but home values are up. And so, investors who own both aren't feeling the same pain as investors who have money solely in stocks. That's the beauty of owning a rental property -- it's another type of investment that might perform well when your other assets have lost value.

ALSO READ: Understanding Portfolio Diversification

Owning a rental home does take work. But you don't have to do that work yourself. If you hire a property manager, you can benefit from a steady income stream without having to spend your own time dealing with tenant issues, maintenance, and repairs.

You may have children or grandchildren you're hoping to take care of financially. If you own a rental property, that home might gain a lot of value through the years. And if you reach a point where you no longer need the income yourself, you can pass that home on to your loved ones.

Owning a rental property carries risk. And you may have other investments that better align with your tolerance for it. But it does pay to consider the upside of owning a rental property -- especially if you have cash at your disposal and are looking for a way to branch out into different types of assets.

The Motley Fool has a disclosure policy.