The Three “You’s” in the investment book
1. You pay less tax
You can deduct certain expenses from your income – reducing the taxes you owe. The list includes:
utility bills (if you include them in the rent).
2. You may be able to deduct losses for tax purposes
If your expenses exceed your rental income, you may be able to deduct that loss from any other sources of income you have. This could reduce your total tax bill. As a landlord, you can deduct certain property expenses from your income – reducing the taxes you owe. If your expenses exceed your rental income, you may be able to deduct that loss from any other sources of income you have.
3. You get a regular monthly income
Other kinds of investments may pay out less often or income may be less predictable.
As a landlord, You have a Fixed rent coming to you every month.
A good tenant can create wealth for you by paying for the mortgage, insurance, taxes and monthly fees through their rental payment to you. In addition, consider this: you have just taken over an asset leveraged by a fraction of the value. In other words, let's say you purchased a house at $250,000 for $50,000 down payment. If it grows at 2.5 percent per year which is $6250 first year, and onwards you're making more than 50 percent return on your money that you actually invested. Oh, forgot to mention the envelope of 1000$+ cash per month from your tenants AFTER paying off your mortgage and hydro bills. Thats 12000$+ extra a year for you to spend or pay towards your mortgage, or save for your second investment property! You can't get that kind of power behind mutual funds or for that matter in any other legal investment!