Is Buying Income Property A Smart Investment?

Is Buying Income Property A Smart Investment?

Is Buying Income Property A Smart Investment? Who really pays the most taxes explained by The Truth about How the Income Tax System Works?

Everyone seems to want a home they can call his or her own. Their homes come in an array of forms and styles. And the personal characteristic of a home is as vast as the imagination can possibly conjure up.

That being good there is also another type of property that can bring a financial benefit to its owner and maybe more than the traditional single family home. That is income property or sometime called investment property. These properties come in many forms but for most individual investor of real estate duplex, tri-plexes, and four-plexes are the norm.

Today’s rapid real estate market makes it very difficult to purchase a single-family home without stiff competition. However, buying a duplex, (income property), which will produce a steady stream of income for you.  Additionally, most people want a single-family home so the competition is not as fierce for income property when you are trying to purchase a home.  This will lack of people wanting to purchase income property over single-family homes lowers your risk of over paying for your new home. Likewise repair costs are less when you compare the costs for a single family home.  If you should lose income for any reason, you will still have income to offset your mortgage with the rents you regularly collect.

Income properties like a duplex or triplex, through the rents collected, will eventually pay for its total expenses.  It will pay principal, interest, taxes, insurance, utilities, advertising, landscaping, management costs, and more. A payment for the costs of ownership will not come from your personal bank accounts either; instead it will come from the income property account. You will have money coming in every month, year in and year out, even if you have a vacancy. Sure the empty unit will cause you loss of revenue, however, after time the rents increases will help off set any of your expenses.  So any losses will be minimized at worse.

When you have a multi-family residence they are easier to manage and keep up than say the same number of single-family homes. Single family homes tend to be scattered in different locations. Even if you build your own multi-family residence the costs are cheaper than individual single-family homes of the same number.

If you wanted to offer features like washing machine and clothes dryers to your multi-family residence or any other coin operated machine you would receive another steam of income. (Only your imagination is holding you back from coming up with another steams of income.)

Banks look favorably on multi-family residences because they will qualify and approve your loan more quickly. Taking into consideration a portion of the rents as your qualification requirements banks view your ownership as a viable business generating income. They know after a few years the property will start repaying the debt by itself.

As you can read owning income producing property have many benefits to the homeowner. My favorite aspect is the passive income it will give during the homeowner’s golden years of retirement.

It you are having a difficult time finding a single-family home I suggest you investigate the opportunities of owning income properties. I think you will be glad you did.