Real estate investment is one way by which people try to increase the worth of their hard-earned money. Real estate has benefited many people across many generations but it has its risks too.
Nowadays real estate has come with a new way of rewarding the investor financially. This is by investing in real estate properties not for personal use or selling, but for renting them out. In many metro cities, rental properties are always in high demand because of the influx of people as their job demands them to shift to a new city.
The rental properties in tourist spots work differently though. You invest in a rental property, a home, apartment, or condo. You furnish the property and stock it with essentials. You will then list out that property on various websites and tourists can book them out for the short term just as they would book any hotel.
Thus, you get to earn money every time someone makes a booking for your property and they come with their family to enjoy a comfortable stay.
If you are an investor in real estate and looking for the best spot for investing in Destin Florida homes for sale, do not look elsewhere. DestinFlorida.com is the perfect resource for all listing forms of real estate properties that are available for sale or rental. The best part is that they list out properties based on their price and location, so you can shortlist the ones that are located in popular places that tourists would like to explore.
Advantages of owning a rental property in Destin
Since you require a long-term capital investment in rental properties, it might take some time before you can start reaping the benefits. Of course, all sorts of investments have times of ups and downs, but that should not discourage you from doing financial investments.
Many benefits owning a rental property in Destin gives to its owner are:
1. You can reap the tax benefits:
- All the expenses that you make to maintain a rental property are tax-deductible.
- So, whether you are making any improvements or stocking your property, you can use them as expenses while filing the tax and saving taxes.
- Property insurance, mortgage interest, and even the repair and maintenance cost of a rental property can be counted as expenses.
- Normally, depreciation counts as a big loss on capital when you try to sell your personal property.
- However, in rental properties depreciation does not cause a major loss unless you are selling it and your cash flow can always be a net positive.
- There are state laws that give tax benefits to landlords. 20% of the net rental income can be deducted while filing for taxes.
2. Reduce your expenses when you are using the property for personal use:
- You can rent out your property year long to tourists.
- You can also use it for personal use when you visit Destin for a vacation with your family.
- You will not have to pay anything from your pocket to enjoy a comfortable stay during your vacation.
- Your total vacation expenses will get covered from your rental income.
3. Instead of buying a completely new property, you can renovate a spare room or space in your own house for rent:
- If you already own a property in Destin and live there as a resident.
- You can always rent out a spare room.
- You can renovate a basement or garage area for the purpose and still save on mortgage interest and other expenses while filing out for taxes.
- Plus, you can earn some extra rental income.
4. You can make use of 1031 exchange:
- As per the 1031 exchange rule, you can sell out your rental property and simultaneously invest in a similar property.
- By doing this, you will not have to pay anything as capital gains taxes.
5. Keep up with inflation in property expenses:
- By periodically increasing the rental amount, you can still make a profit even with the rise of expenses due to inflation.
Self-managing rental property vs hiring a professional manager
Managing a rental property, listing it on websites, and managing bookings and payments is not an easy task in any manner. This is especially true for the owners who are not residing in but want to invest in rental Destin Florida properties to gain an additional source of income.
In such cases, hiring a professional manager is essential as they know the local area well and can keep up with repairs and maintenance much more easily. They can track inquiries, list your property for bookings, and make sure that your property is in the right shape and fully stocked before your tenants arrive for their vacation.
However, if you are residing in Destin and can do it yourself, you can save the commission that you will be paying to the property manager.
Some tips that can help you in self-managing a rental property are:
- Use a third-party booking website for taking reservations.
- They will take all the booking inquiries and send you confirmation about the booking so that you can be prepared.
- However, they will charge a commission on each booking.
- Never forget to take the contact information of those who have already visited your property and enjoyed their stay.
- This will help you in re-marketing without involving third-party agencies and save the commission.
- Keep your property up-to-date with the maintenance as no guests want to spend their vacation in properties that are not maintained.
- Ensure that the linen is clean, the kitchenette and toiletries are stocked, and your housekeeping staff is always on duty during the stay of your guests.
- Respond to any issues your guests are facing within a short span of a couple of hours.
- Keep your property sterile and well-sanitized.
- The towels and linen should all match and there should not be any stains or tears.
Carefully study the mortgage interest rates before you are ready to invest in the property of your choice. Weigh in the profits that you will get from rental income and the interest that you will have to pay to avoid any financial long-term financial stress on your capital. Invest carefully and make profitable earning through rental income.