Seven years ago, while visiting Ohio, Hogarth Louis discovered a great opportunity: investing in rental property.
For Louis, a New York City resident, there were many reasons that Toledo, Ohio, was the right place to purchase a rental property.
“I knew I couldn’t afford a property in New York, but it was clear that I could easily afford a house in Ohio,” he told Finurah. “I chose Toledo because the cost of homes and taxes were low.
Today, Louis owns a single-family home in Toledo, Ohio, and has plans to purchase additional rental properties.
Investing in rental property is one way to build generational wealth for Black Americans. In general, real estate appreciates over time allowing landlords to build equity in their property. This equity can be used to continuously diversity an investor’s portfolio or, for the more conservative investor, build over time, says Louis.
In addition, the tax benefits associated with rental investing, such as deductions on loan interest, contractors and other professional services, insurance premiums, maintenance and repairs, renovations, and even travel are also noted advantages.
Blacks interested in investing rental properties can take these five steps.
1. Research Up-and-Coming Areas
When investing in real estate for the purpose of renting, there needs to be long-term potential, Bob Scott, founder of Sell Land, told Finurah.
Properties in established locations will already be expensive. However, if you invest in an up-and-coming area, you will have future potential. “Look at its potential,” Scott said. Properties in established locations are already expensive so investing in the next big thing will more likely bring you success. Of course, it is always a gamble, but through in-depth research, you can identify the areas wherein there is a predicted boom in the market.”
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