Pros And Cons Of Buying An Investment Property

Pros And Cons Of Buying An Investment Property So, if your income is $200,000, all your annual expenses totaled $155,000 and your initial cash investment on a property totaled around $175,000, the formula would look like this: Your cash back percentage in this case would be approximately .26 or a 26% return. What constitutes a “good” return percentage is relative to the investor. It all depends on your personal financial goals and what you expect to make back. Buying and selling or renting out property can be a potentially lucrative investment if done right. But like any investment, there are still pros and cons. Before sinking potentially thousands of dollars into real estate, let’s consider some of the benefits and drawbacks of becoming a real estate investor. Investment Property Advantages You can take advantage of tax benefits. There are a number of real estate investor-specific tax benefits that you can take advantage of once you’ve purchased real estate. For example, you can deduct operational expenses like property insurance, mortgage interest and property management fees from your taxes. Real estate appreciates in value. Unlike other investments that could fluctuate wildly in value, real estate tends to increase in value as time goes on. That means that if you give it time, you can likely sell a property for a profit just by letting it appreciate with value, which makes it a fairly safe investment in that regard. You can earn consistent income on the side. If you’re renting your investment property out to tenants, you’ll make consistent income the best payday loan Tennessee from their rent payments which will not...