Owning a house is a symbol of status for many people. But with limited finance, you may not be able to purchase your dream house and settle down by making compromises. So instead of compromising isn’t buying an investment property a better option?
Many people prefer to purchase their first or second home before investing in real estate. But why wait? Buying an investment property before your first home is a good idea. Here are few reasons that will fully convince you that why should you entertain the idea of investing in real estate before buying your first home.
The dream house on which you have set your eyes may be worth millions and out of your budget. You may need to wait for many years to own such a house. So instead of waiting for several years, you can become a homeowner by buying an investment property within your budget. You can buy an investment property on the outskirts of the city where the prices of the house are affordable with a higher average rate. As the purchase price is low, your mortgage payment will also be low and thus you will be able to manage your monthly budget as well as make some profit from the monthly rent. Top realtors in San Antonio will help in finding an investment property that suits your pocket and gets you a higher monthly return.
An additional source of income:
Instead of buying your own house and paying the mortgage yourself, consider buying an investment property for rental purposes. In this way, the tenants pay the monthly mortgage and you start building equity on your property without paying a single amount towards the mortgage. Buying a property for rental purposes opens the door for additional income. You can also use the monthly rent to pay off other bills and debts or save it to purchase your dream house in the future.
Maintaining your lifestyle:
When you decide to buy your first home with a limited budget, you have to compromise on location and size. But if planned properly, you can stay in your dream house by renting it and at the same time become a homeowner by buying an investment property. The monthly rent earned can be used to pay off the current monthly rent. Real estate agent in San Antonio will help in renting a house as well as buying your first investment property.
Investment property helps in building equity and also creates leverage in the future. Investment properties that are purchased wisely grow in value and offer you a good amount of wealth and equity. You can sell your house at a good price in the future and thus manage to purchase your dream house within a short time. You also have the option to refinance or use the monthly rental to leverage buying our first house in near future.
Buying an investment property before your first home gives you the freedom of changing your dwelling whenever you need it. For young, single, or married people without kids flexibility in lifestyle is most important. As you are staying in a rental, you can easily relocate to a new location for growth prospects or a job change. You do not have to worry about your investment property and your monthly income remains secured.
You may not be able to purchase your dream house due to budget constraints but you can buy an investment property in partnership with your close family member or friend and fulfill your dream of owning your dream rental. Family members and friends usually do not help us in purchasing our dream house to reside in. but, they will willingly invest together in a rental property.
Many a time it may happen that the house on which you have set your eyes may be within your budget but the location may not be ideal for residing. It may be too far from your workplace or your kid’s school. It may also not be in the city you are living in. So instead of losing your dream house, decide to purchase it as a rental property. You can continue staying in your rented house and shift to your dream house when time permits. This way you will loose on the opportunity of buying what you most desire.
Owning a house adds to your tax burden while rental real estate has more tax benefits. Interest on a mortgage of your rental property can be deducted from your tax payment. As rental investment property is a long-term tangible asset it falls into the category of a capital asset. Thus, after the first year, you can deduct depreciation in smaller amounts, over a longer period of time from your tax payment. Also, any repairs (other than improvements) carried out on the investment property within the year are tax-deductible. Moreover, any insurance premium such as fire, theft, and landlord liability insurance are also tax-deductible.
The above reasons clearly state that buying an investment property before buying your first house is a smart choice. It is a good real estate investment strategy and profitable in the long run. You can adjust in a rental house for a few years and keep building equity on your investment property. Purchasing an investment property will help you in achieving your goal of buying your dream house in the future.
Published by Reyes Signature Properties