Rental Income

Rental income is the best income there is. There is no FICA tax. Increasing property values are not taxed until you sell, and then at low rates. Rentals can be set up to make money cash-wise each year, but show a loss on paper. This generates tax savings each year. All that being said, I could never be a landlord. There are frustrations and hassles that I could not handle. Be sure you are up to the challenge.

If you use a management company to avoid the hassles, they will make money, but you may not. Owner occupied rentals, such as a duplex where you live in half, can work well. On-site landlords get better tenants. Problems are minimized because you are there every day. Stay on the high end of the rental scale. You get better tenants and have less problems.

Put money back into the property each year. Find things to fix and improve. It gives you a tax deduction. It is a good excuse to get inside the apartments to see how well the tenant is taking care of things. It also shows that you care about the condition and upkeep. Tenants will show the same respect for the property that you do.