By Vicki Johnson
, we have noted the benefits of buying investment real estate under current market conditions – and using these
to help accrue income for retirement. Now is a prime time for investors to get in the game; but it is also important for buyers to understand the complexities and commitments involved in second-home ownership as well as the rewards.
reports that, in today’s market, prospective investors need to realize, first and foremost, that the days of “flipping” homes for high profits are over. That said, it is still possible for investors to make smart purchases, become mortgage-free, and ultimately enjoy a steady stream of supplemental income.
When deciding how to proceed with a real estate investment purchase, consider the following guidelines:
- Manage your expectations: be realistic about the profit timeline for your purchase.
- Prepare for mortgage payments: because rental properties usually come with higher mortgage rates than owner-occupied properties, expect to pay at least today’s standard 30% deposit in order to secure a loan.
- Take advantage of tax benefits: claim depreciation on your rental property and escape the full burden of income taxes for up to 27.5 years.
- Expect to work hard: being a landlord comes with its own set of challenges, and it is important to ask yourself honestly if you are up to the task before accepting the responsibilities of rental ownership. Management companies can be a good alternative for those who do not wish to take on full-time landlord duties. However, remember that such services will cost money – and that, in turn, will cut into your available retirement funds.
Ultimately, investing in real estate is a personal choice, best dictated by one’s personal finances, aptitude to handle landlord duties and willingness to study mortgage rates and tax options for optimal income and security. If you are considering an investment purchase, an experienced real estate agent will be your greatest ally during the initial planning stages.
As a local real estate agent with extensive knowledge of the
, I excel at helping clients select the best property for their desired price range and level of involvement. Get in touch today to set up an initial consultation by visiting my website: