Investing in property does not always mean that you are going to make money. In fact, it takes a lot more than that to be making money in real estate. But what makes income properties the best investment properties in real estate investing? Keep reading.
Making money in real estate is as easy as you want it to be. It takes the right type of investment properties, to begin with. So, we will break it down for you in order for you to get a better understanding of what income properties are. Then, we will talk about the reasons why income properties are a great way to make money in real estate. Lastly, we will introduce you to the best real estate tool that will help you spot the best investment properties out in the market.
Related: 6 Benefits of Investing in Income-Producing Properties
What are income properties?
Generally speaking, an income property is one that is built or bought in order to make money. You could rent it out, renovate it and sell it for a higher price, or even hold onto it for appreciation. Also, it does not have to be residential only, it could also be commercial or industrial.
What makes income properties a great way to make money in real estate?
This is for those real estate investors who have financed their properties with external financing. Over time, you will be paying down the mortgage, which means you will be building equity along the way. That is while your property is appreciating. What you can do is to use that equity to further grow your business and purchase more income properties.
The whole point of investing in property is making money. Making money here comes in the form of cash flow. It is basically the money you are left with after subtracting the property expenses from the overall rental income. In other words, good income properties are those that generate positive cash flow at all times. At this point, you are probably wondering how to know if certain properties are positive cash flow income properties. No worries, we are not going to leave you hanging. We will introduce you to the answer at the end of this blog, so keep reading!
Related: What Are the Best Ways to Make Money From Your Income Properties?
The great thing about income properties is the easy financing. As we all know, a lender always looks for guarantees. What could be a better guarantee than the income itself? This is especially true for residential properties. Therefore, if you are looking for rental properties, go with residential real estate investing.
On top of all that, investing in income properties comes with low interest rates on the loans. So, you might as well take advantage of that.
You are in charge
With income properties, you are your own boss. Forget about the 9-to-5 job and forget about being bossed around all day. You own the properties, you choose your tenants, you decide what rent you want to charge, etc. Oh, and that is not all. You get to choose how to manage your property. You can do it yourself, or you could hire investment management firms to do it for you. Either way, you are in control.
All income properties are subject to appreciation. In other words, all income properties rise in value over time. However, some kinds of properties appreciate faster than others. For example, residential properties tend to have higher annual appreciation than commercial properties. Even with residential properties, single-family homes appreciate faster than multi-family homes. So, if you want to benefit in the long term, you must be wise choosing the right property type when investing in property.
The great news for all real estate investors is tax deductions. Income properties are subject to tax benefits that apply to property expenses, losses, and depreciation. Therefore, a good idea would be checking your state’s tax regulations to see what benefits apply to your properties.
Related: What You Need to Know About Real Estate Taxes as an Investor
Investment property calculator: The best tool you could possibly ask for
Well, if you are wondering how to make money in real estate, the investment property calculator is the answer. Though not in a direct way, it is a tool that will make that happen for you!
An investment property calculator is simply an online tool. As simple as that sounds, it is still a powerful tool. As you already know, real estate investing is not all about the money. There are many calculations involved in order to make sure that you are making a profit. These calculations include cap rates, cash on cash return, cash flow, rental income, return on investment, and so on. Can you imagine doing all these calculations for multiple income properties on your own?! That is totally insane!! In fact, that is exactly why there is an investment property calculator.
This calculator is a must-have for all real estate investors. No matter how experienced a real estate investor is, he/she still needs it. This tool is used to perform both investment property analysis and real estate market analysis in the most accurate way. It will also help you choose the right rental strategy in any location as well as picking the best investment properties for that certain location.
As to where to find the best rental property calculator, you will not have to go far. Mashvisor is the place where you should be looking. Our rental property calculator is one of the most advanced real estate investing tools available online. With our calculator, you will have all the information you need on your investment properties all in one place. Why wait? Check it out now!