When you think about real estate, you may only have considered buying a home for yourself or your family. But buying investment property, which may vary more widely in type or function, is a smart financial move both short and long term.
- You Can Afford Luxury:
You may have been eyeing some beautiful luxury homes knowing you can’t afford to spend that much each month on living. But buying investment property allows you to defray some of the immediate costs. Whether that means buying a nicer property and paying some of the mortgage with rental income or just saving profits to buy more real estate for yourself in the future, an investment property can bring in the additional income necessary to upgrade your lifestyle.
- Its Value Will (Probably) Increase:
The current real estate vista isn’t quite as idyllic as it was before the housing bubble burst, but buying a home or other property is still a good investment overall if you’re willing to play the long game. Even if your property appreciates only 3% each year, that’s more than most savings accounts or CDs. Of course, location and the specifics of a property will impact how profitable you can expect buying investment property to be: Home appreciation in Gilbert, Ariz., for example, averaged a staggering 17.7% last year. Research carefully and consider enlisting the help of a real estate agent rather than trying to brave the real estate listings alone.
- You Won’t Have To Do a Thing:
Owning an investment property doesn’t necessarily mean you’ll have to pour time and energy into being a landlord. There are well over 200,000 property management firms in the U.S., and the sector has grown at 3.1% annually for the last five years. It’s true, property management services obviously come with property management fees (In the U.S., the industry brings in about $69 million each year). But especially if this is purely a financial move, you can reap the long-term financial benefits while leaving the stress of finding and dealing with tenants to the professionals.
What kind of investment property are you considering? Let us know in the comments.
Helpful research also found here.