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Buying Investment Property

Investment Property for Rental Income

Are you considering buying investment property for rental income?

Many people have built great wealth off Real Estate investments, it is a great way for entry level investors to get into the marketplace, and has served as a platform of building an investment portfolio for many. There are a couple of clear cut reasons why Real Estate is great for the new investor:

  1. Tax advantages- Depreciation, mortgage interest deductions, 1031 exchanges, and capital improvements are some of the great tax benefits offered to property owners, so while you collect your income off the property, the property can be leveraged as a great income tax deduction through several means.
  2. Appreciation/Income- Along with a check every month, Real Estate historically has always appreciated at a stable rate over time.
  3. Loan Advantages- As long as you meet the banks criteria, they are friendly to the Real Estate investor, offering competitive rates, options, and various forms of funding, even in some cases offering to finance construction of the property into your loan with as little as 5% down.

 

Finding the Diamond in The Rough

How do you go about finding those properties that offer the greatest value?

Firstly, brokers can be great guides through this process, particularly brokers that work with investors or who are investors themselves. My suggestion is finding a neighborhood that you are going to focus on, look at population growth trends and track where people are moving to speculate continued growth and increased demand. This first purchase should be close to home, so you can check on the property, nevertheless, most people feel comfortable making their first investment nearby.

Get acquainted with pricing and returns that the neighborhood you have chosen offers. Learn what the income should generally look like off the units, what the homes are selling for, and what type of returns they offer. That way, when a unique opportunity arises, you are in a position of knowing the market and are comfortable moving forward with the deal. Many people get stuck in this phase, and either cannot commit or are looking for a unicorn, your expectations needed to be realistic, and when the good deal comes about, be ready to take it.

 

Frank Morris

Licensed Real Estate Salesperson

71 Pondfield Road

Bronxville NY 10708