Investment Property 101

Getting an investment property mortgage can be a bit overwhelming, especially if you’re a first time buyer of income property. Although it can seem like a stressful thing to do, purchasing an investment property can be more interesting than you think.

What is an investment property?

Any type of property that is bought with the intention of a return is considered an investment property. This includes single-family homes, duplexes, vacant land, apartment buildings, and commercial property.

Why should you invest in property?

Investing in property is not right for everyone, although it does offer a number of advantages. Some of the various pros and cons of this type of investment include;

  • PROS
    • Capital Growth: Regardless of the type of property, the growth will increase over time.
    • A safe and smart investment: This market is not saturated with investors, which offers a natural buffer for this market. This investment is also considered forgiving. For example, even if you buy the worst home in the area there’s still a good chance the value of the property is going to grow as time passes.
    • CONS:
      • Liquidity issues: While you can sell the property if money gets tight it’s definitely not as quick a process as other investments. Bear in mind that selling property is never a quick procedure.
      • Ongoing and hidden costs: In addition to the initial investment you’ll also have to consider the continuing costs involved with the property, including taxes and maintenance.  However if you’re properly priced how much you’re going to rent your property out for then you should be able to cover these costs without paying out of pocket.

Investing in property is not something that should be taken lightly. It’s important to understand the type or property and market that you’re looking to invest in. If you’re looking for help, but don’t know where to start, call the experts at Kupina Mortgage Team today: 1-888-955-9011.

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