Rental homes are the IDEAL investment because they offer a higher rate of return than other investments without the volatility of the stock market. With certificates of deposit and bonds, people need an alternative investment that they understand and have a reasonable amount of control over.
In this case, IDEAL is an acronym identifying the advantages of rental properties.
• Income from the monthly rent contributes to paying the expenses and a return on the investment.
• Depreciation is a non-cash deduction that shelters income for some investors.
• Equity buildup occurs with amortized mortgages because each payment is composed of interest
owed and principal reduction to retire the loan by the end of the term.
• Appreciation is achieved as the value of the property goes up.
• Leverage can increase the return on investment by using borrowed funds to control a larger asset.
These individual benefits working together make rental real estate a good investment
for today’s economy.
