An income property is the property bought and developed for the sole purpose of bringing in an income for the property’s owners. Common examples of an income property include the renting of a house to everyday tenants, or renting out a space to professionals as office space or for a shop front. There are many benefits of investing in an income property, however, there is also a huge amount of responsibility. Ensure you research, consider your finances and find property which is reasonable to develop. Here are 4 reasons why you should invest in an income property, and how make it a successful asset.
A Creative Outlet
Once you’ve bought a second property, you have the ability to decide how you decorate, refurbish and maintain the property. For many people, renovating a property is a dream come true. The freedom to turn an empty shell of a house into something spectacular is invigorating to them. The decisions to be made allow you to have full creative control. For example, if the plumbing needs fixing, it’s up to you to find a plumber nearby. You also get to decide the furnishings, from the big ticket items such as the kitchen’s interior, to the colour of the front door.
Your Own Boss
Usually, people will stick to their 9 to 5 job while purchasing and setting up their income property so it’s fit for purpose. However, if you’re able to rent out your property for a hefty amount of money, you have the opportunity to turn it into a new career adventure while being your own boss. Also, by being in charge of your own property, you can decide what property you invest in, what tenant you rent to, and how much you charge. You also get to decide how you manage and maintain the property.
Earn Extra Money
One of the biggest perks of having an income property, however, is the extra pocket money you’ll attain from your tenants through their rent. If the property is paid for, and their rent doesn’t have to go towards anything else, then their rent can go directly towards you as a large added bonus to your usual income. However, even if you do have to take out a mortgage on the property, you can charge higher rent from your tenant and pay the mortgage without any extra charges. Also, every year that you own the property and use your tenants’ money to pay off your debt, you’re reducing the amount of your loan and, therefore, increasing your wealth.
Tax Write-Offs
As an income property owner, you can experience large tax deductions on the interest of your mortgage, or any credit cards used to make any purchases for your income property. Tax write-offs can also include property insurance, maintenance repairs, or any legal fees. Therefore, you don’t have to worry about paying for any unexpected repair, and any fees charged by a managing agent can be claimed back at the end of each financial year.