Investment property is property (building or land) that you acquire to earn a return in the future, either through renting or selling. This kind of investment can be done by an individual, a group of people who decide to invest, or even a corporation. If you want to purchase an investment property and are still lingering on the fence about it, here are reasons why it can make sense to purchase an investment property, or buy investment property with cash then refinance. Mrs. Money and I have had a rental property for about 2 years now and although it’s not all been peaches and roses, it’s proven to be a great investment for us.

1. Resilience of the Industry

The real estate market is very resilient compared to other markets like the stock exchange, where you can lose a lot of money in a few days. Purchasing and selling in the real estate market rely on supply and demand, among other factors. Generally there’s always going to be demand for places to live and prices generally go up, slowly, over time.

With a good financial advisor, and working closely with an experienced realtor, you stand a high chance of making the right call.

2. Property Appreciation Value

When you want to buy an investment property, you can use a small amount of your money and borrow the rest from a lender such as a bank (that’s if you have a high credit score). A decent credit rating will allow you to get a reasonable rate on your mortgage payments. 

This will enable you to have enough money to buy a high-income property and enjoy the fruits of the increased value of your property. The appreciation itself after ten years will multiply your investment several times. 

3. Tax Write-Offs

Rental property owners are entitled to certain tax deductions, including the interest on their mortgage and credit cards, insurance, and property taxes, among other things. There is also the depreciation/appreciation aspect where you can increase or reduce your property’s price according to the depreciation value it has. 

As such, it’s prudent to ensure you have your property valued regularly, and of course keep great records and receipts for tax time.  

4. You Are the One in Charge

Having something that you are in charge of is often a goal of young professionals. Owning property is not an easy task, and one of the best reasons to purchase an investment property is that you are in a position to make the decisions. 

There are so many different ways to make money from owning or purchasing an investment property. You can sell the property, rent it out, or decide to live in it. 

You are the one who will decide the amount to rent it out for, the maintenance charges, and you can even turn it into a bed and breakfast for people who come to that area for a short period. 

Summary

If you are looking for a reason to purchase an investment property, then the tips highlighted above should make the decision easy for you to make. Of course it’s a big decision but if you’re in the right space financially and willing to put in some work, real estate investing has worked out for many young professionals.

The returns are great and there are multiple ways to generate money from them. You will also get tax reductions in several areas. With the right guidance, you can rely on the real estate market to generate wealth. So what are you waiting for? Take the leap today and buy that investment property you’re eyeing so much. 

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