Turning Your Home Into A Rental House
In accordance with the American Association of Realtors, the average American buys seven houses throughout their lifetime. In my view, those are seven houses that we must always hold onto for the rest of our lives, to come up with monthly earnings and long-term financial security for our families.
The usual process that we follow is to market the home that we live in and to utilize the cash from the sale to purchase a new house. What I advise is to apply the latest process. If we tweak the old practice just a bit, it may end up in a tremendous change in our net value and our financial security.
I suggest that besides selling your home, just refinance it, and use the cash from the refinance as an installment on your next house. Now, you have possession of two houses and you can just turn your old home right into a rental house. It's almost as easy as 1 2 3.
The 3 steps to turn your home into a rental house
1.) Refinance your residence.
2.) Make use of the refinance money as a down payment to purchase a brand new house.
3.) Move into the new house and rent out the old house.
Both instant advantages of turning your home into a rental house
1. You have a new source of income flowing in, in the form of rental checks. This earnings gives a fresh layer of security because it does not depend on you working regular hours, also it continues to flow regardless of whether you lose your regular job.
2. Formerly, you had just one house, which was increasing in value an average of 5% each year. For example, a $200,000 house would increase in value to $300,000 over 10 years, for a return of $100,000. When you own two houses, your revenue would increase to $200,000 in ten years.
Like having an additional allowance without retiring - only better!
Having rental houses far exceeds the benefit of the pension that you receive from the job. I worked for the state of Arizona for 13 years, and I will sooner or later get a retirement fund of around $1,000 a month. But guess what? Each year the value of my annuity will decrease since it will not be tied to inflation. So, after 10 years, I'll still receive $1,000 a month but by reason of inflation, it could be in reality only worth $100 dollars a month because the cost of my groceries, my clothes, health care, and other costs have all gone up each year.
Rental houses provide the best pension. If I buy $1,000 a month in rent income, it not only keeps up with inflation, nonetheless it exceeds inflation. Which pension program would your rather have? One, which increases in value with the passing years, or one that lessening in worth?
Why didn't I turn my home into a rental house a long time ago?
Even if you purchase just one rental property throughout the course of your whole life, your economic picture will soon get better. You will wonder, as I did, "why didn't I do this a very long time ago?
Article Source: FxTradingStock.com
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Another great article by Downtown Toronto Real Estate
by: Tara Millar
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Word Count: 539
Date: Fri, 9 Jul 2010
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