The Advantages of Owning a Rental Condo
For some, a rental condo may be a furnished second home in a resort area. The owner uses it occasionally, allows family members to occupy it for brief vacations and, for the most part, rents it to short-term visitors. For others, the rental condo is simply a rental property --- tenants bring their own furnishings. In either case, advantages exist for owners in both situations.
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Location
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When you purchase a rental condo, you get to own a property in a location you desire. In many city hubs and outlying resort areas, condo complexes feature amenities including workout rooms and fitness centers, swimming pools and spas, tennis courts, beach access or cross country ski trails. For city dwellers, a downtown condo can eliminate the need for long commutes, put residents close to restaurants and entertainment and eliminate the need for outside maintenance. Also, since condo associations impose rules, the association provides a buffer between the owner and tenant. The association usually notes noise and other misconduct violations and contacts the tenant.
Income
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Tenants pay and the owner receives rental income. If yours is a resort condo, you can often find a management company to handle all the details of renting the unit. The management agency usually takes a percentage of the rent in exchange for booking rental dates, taking in rents, cleaning and providing housekeeping services such as towels, bedding and daily maid service. If yours is a vacant rental condo and accommodates longer-term tenants, they pay rent as well. Usually, with a condo, exterior maintenance is handled via the condo association, so tenants have no responsibility for grounds upkeep, so outdoor maintenance becomes a non-issue to the owner.
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Potential for Appreciation
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A condo is real property. Like a house or other real estate, it has the potential to appreciate in value over time. The owner remains the owner. He can hold the property until the market feels right to him to sell. He can list it for sale regardless of whether he has tenants.
Tax Advantages
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A condo qualifies as a second home with second home tax advantages because it accommodates sleeping and cooking and has toilet facilities. If you are the owner of a vacation condo and want to claim the allowed tax breaks, you must track the time you and your family spend at your vacation rental in comparison with the time you are away. If you rent a vacant condo to longer tenants, you may be eligible for different tax benefits associated with having rental properties. A certified public accountant can offer qualified guidance for tax matters and help you maximize the tax benefits of rental condo ownership.
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References
- Photo Credit beach resort skyline at sunset image by bruce from Fotolia.com
