Investment properties are pieces of real estate that are bought for investment purposes. Buyers of investment properties typically rent out their financed purchases and use the rental income to cover the mortgage payments to eventually own the asset. They hope that a property’s value will also increase over the years and generate extra capital returns.
The world is a very unpredictable place and no one can say for certain what the future will bring. Life seems to be getting more difficult with living expenses increasing each year, and the economy showing no signs of stabilising. As a result, many people are attempting to introduce some sort of security to their lives by working hard and making wise investments.
Investing in real estate is one of the safest options for those looking to prepare themselves and their families for unexpected events in the future. Most of the world’s wealthiest people made their riches from property investments and many keep their wealth in the real estate market.
Here are 5 amazing benefits of property investment:
1. Long Term Financial Security
Something that many of us don’t take time to consider when we’re young is our future financial stability. Yet, this is incredibly important as we journey through life. The real estate market gives you a chance to plan for your future and get yourself into a comfortable financial position. We realise now that it’s foolish to trust any company to provide for us when we retire and stock market fluctuations mean we can’t rely on traditional investment funds either. With an investment property portfolio, you have the opportunity to take control of your financial future. Property has the potential for capital growth and offers immediate returns via positive cash flow.
2. Generate Passive Income
When you choose a positive cash flow property, it’s possible to start generating a passive income almost straight away. The money you receive in the form of rent payments can go towards the home loan and any leftover can be used to cover your living expenses or to boost your retirement savings. It doesn’t matter what size of investment property you buy, any amount of passive income is beneficial. What’s more, as rent charges typically increase each year, but your mortgage payment remains fixed, your cash flow will likely rise over time. The more you can charge for rent, the bigger your passive income.
3. Leverage For Rapid Growth
Caveat loan specialists at Max Funding say, “The most different thing about getting into property investing is buying your first unit. However, once you have one property in your portfolio, it becomes easier to expand. You can use the returns from your first investment to cover the cost of the down payment for your next property investment.”
The term used to reference untapped value in a property is “equity”. It is the value in your property that you haven’t used to secure a loan. As a property increases in value, your equity increases also. You can use the equity in a property to fund deposits for future investments in the real estate market.
4. A Way To Save Money For University Tuition Fees
Investments in property can often have a better return rate than a conventional college savings account from a bank. Parents should invest in one property for every young child they have that plans to go to university. Each property can be financed with a long term mortgage that ensures the property is completely paid for by the time the child turns 18. A family can use the rental income from the property to pay the monthly mortgage repayments.
5. Unleash Your Inner Entrepreneur
There is a wide range of ways to become a successful entrepreneur in the real estate market. You could buy a rundown property, restore it to a habitable home and resell it for a profit. Or, you could buy a property and let it appreciate over time. You could also become a landlord and buy properties, such as apartments and family homes, to earn a monthly rental income. Maybe you are more interested in land development projects. The possibilities are endless.
The five benefits outlined above are just a small selection of the dozens of reasons to invest in property. By seeking expert advice and dedicating yourself to your goals, you can build an amazing property portfolio that will pay off for decades to come.