Home Additions May Offer Opportunity for Rental Income
Room additions are often intended to help a family better fit in (or enjoy) their homes. However, there’s another common reason for a home addition project. In many cases, it can be a financial decision, as a way to allow for ongoing, long-term rental income.
In this case, the cost of the addition is seen as an investment. As an additional incentive, there can be tax advantages as many expenses related to the improvement, repair or maintenance of a rental property are tax deductible. (Be sure to ask your accountant or check the IRS website for specific rules.)
The addition may not be used solely for a rental situation. Perhaps its initial or eventual purpose is to be used as an in-law suite or for an adult child. But keeping the space occupied with tenants when it isn’t needed by family is a nice way to offset some of the property expenses.
If you’re planning to use your addition as a rental, at least part of the time, that will affect important decisions in your planning process. Your personal tastes and preferences shouldn’t be the top priority. Instead, you want to look at what will make the space most attractive to renters, and what will help you get the highest possible rent amount.
Whatever the purpose of your room additions, we can ensure you are happy with the final result—and that the project fits your budget constraints. Contact us today to discuss your project.