Is renting a home a good investment?
John Johnson
Updated on March 11, 2026
Owning a rental property in addition to your primary residence can be a way for you to build wealth, especially if you may be averse to investing in the stock market. With a rental property, someone else pays your mortgage, and over time your equity grows.
How does owning property make you money?
The most common way to make money in real estate is through appreciation—an increase in the property’s value that is realized when you sell. Location, development, and improvements are the primary ways that residential and commercial real estate can appreciate in value.
What is considered income producing property?
Income-producing property is real estate you invest in to make money from tenant rent payments, appreciation in market price, or adding value with additional revenue streams.
How can I get rich fast?
How to get rich quickly…or not
- Playing the lottery (and counting on it for your income)
- Joining a multi-level marketing company (MLM)
- Day trading.
- Make more money.
- Invest in yourself and your education.
- Educate yourself about personal finance.
- Create and stick to a financial plan.
- Live below your means.
What makes a rental property a like kind property?
The rental portion of the property is considered like-kind. The portion used as a personal residence is not. Further, the residential portion may qualify for capital gains tax relief under the Taxpayer Relief Act Of 1997. With this provision, a single-filing taxpayer can exempt $250,000 of capital gains liability.
Can you buy a house and use it as a rental?
Buy As an Owner Occupant (OO) The best way to get into the landlord business is to buy a home that makes sense as a rental property, but you buy it as a personal residence, and live there for the required twelve months that an OO loan requires a borrower to do.
How can I buy a rental property with no money down?
Another idea to buy a rental property with no money down is to borrow money from your current residence. Home equity lines of credit (HELOCs) are especially useful for this. You secure a line of credit against your home, and you draw on it as you need it, and pay it back with rental income. You can even take out a HELOC on an investment property!
Can a property held for sale be considered like kind?
What is property held for sale or resale? If the IRS determines that you hold property primarily for (re)sale instead of for investment, that property won’t count as like-kind. Simply put, a property held for sale or resale is one bought just to be “flipped”.
