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The Pros of Investing in Property

The Pros of Investing in Property

Buying to let-properties can be your start to a promising future and financial growth. The major players in this line of business say that there is no other business out there, which gives returns within a short time like property. If you are looking for something to give you a steady flow of income without too many hassles, you will never go wrong with the property business. For those who are still struggling about what to invest on, here are some reasons why investing in property, is beneficial:

1. You are your own boss

If you are considering going into employment or investing in property, the latter is better in all aspects. It makes you your own boss. You decide on the property you want to invest in, the target tenants and the rental rates. With this type of investment, you can forget the nagging boss, the unending office assignments, and the low pay. To understand this in the best way possible, look at the property business as a system. It generates money even when you are asleep and you decide on what to do with the returns. Who would resist such an idea? Certainly, this is incomparable to stock or mutual funds, because these too require the company to manage the money on your behalf.

2. Improvement on a highly leveraged asset

An asset become leveraged when the buyer borrows quite a large amount of money from the bank to supplement their investment capital, which, combined they are able to secure the property. If you buy the property with such terms, within a few years, it will have appreciated and not only on the money that you contributed directly, but on the whole value of the property.  Here you earn money from the borrowed money, which can help you in clearing the initial loan by taking out an equity loan.

3. You enjoy the rental income

Depending on the rental rates of your property, each month you are bound to receive a certain amount in your account, based on the units in the building. However, the net rental income will be realized after subtracting the maintenance costs and other related costs. All the same, this money will flow every other month.

4. The tenants will take care of the mortgage loan

Mostly, when you take out a mortgage, you are given a fixed rate that follows a 30-year period. In the first 15 years, you pay the interest but in the rest of the loan duration, you pay the principal. Hence, the longer you hold onto the property the better for you, since, as the tenants will be paying for the principal, you will continue accumulating more wealth.

5. Tax deductions

Investing in property automatically makes you a candidate for tax write offs. As a property investor, you can make deductions on the mortgage or credit cards used to make the purchase. It is also possible to write off the maintenance costs, insurance, legal and professional charges as well as property taxes. Besides the aforementioned tax deductions, the government permits you to depreciate the purchase price of the property, even when its value is appreciating.

Investing in a property can be a leeway to your financial freedom. If you are able to choose a profitable investment property, you will benefit a lot from the property; from rental income to saving on taxes, not to mention being your own boss.

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