An investment property is often described as one of the core building blocks in the real estate market. With that said, owning an investment property is no longer something that only professional investors engage in. Today, everyday people with regular jobs and lives go ahead and invest in property in the hope of it helping them to reach their financial and personal goals.
If you’ve been watching the income property trend grow over the past few years and you’ve been curious as to whether it’s right for you, then it’s a good idea to research the main reasons people are going ahead with investment properties. Here’s a look at the top reasons you may want to consider getting into the income property business.
Use It as a Source of Revenue
One of the main reasons to consider an income property lies in its title – it can provide you with income. For many people, the source of revenue that an income property offers is enough to lure them in. Depending on the property itself and the rent that you can charge, you may be able to make instant revenue.
Take for example a property that you have a $1,000 monthly mortgage on. If you can charge $1,300 in monthly rent, then you automatically have $300 worth of revenue coming in. That revenue could be used to pay other bills, used for savings, or anything else that you want. Now what you have to be mindful of is the fact that you need a property that will allow you to charge more for rent than you are paying in the mortgage.
Of course, out of that revenue you also need to remember that maintenance costs will come up, so it’s important to put a bit of that revenue aside. Also, there are property taxes, which can be higher in some areas over others.
Use It as a Way to Boost Your Own Financial Portfolio and Capital
Maybe you have your eyes set on more of a vacation or holiday property that caters to tourists. If that’s the case you may also be looking at exotic locations and options like the Samui property investments in Thailand.
Holiday rentals in up and coming tourist areas, or those that are experiencing steady growth, like Thailand, offer the soundest investment options. This particular area is growing quite a bit, with some of the most popular tourist areas bringing in capital gains of 15%. What this means from an investment standpoint is that you’ll be able to get maximum gains on your initial investment, thereby boosting your capital.
Lower How Much You Pay in Income Tax
Another big reason that people look into investment properties is that in some countries owning rental property actually lowers the amount of income tax you will need to pay. A number of items can be written off such as the fees and costs that relate to the property. The less you pay in income taxes, the more money you’ll have left in your pocket.
Each of these reasons can act as the tipping point for you and may help you to reach a final decision.