The Pros and Cons of Investment Properties

  • July 09, 2015

Many often think of an investment property as quickly flipped home; a home that has been purchased, renovated and upgraded, and then sold at a much higher price that it was purchased for. However, the most common investment property is a rental property. Have you been considering investing your money in this way? Here are the pros and cons to consider before taking the dive.
 
PROS
 
Diversify your holdings – a great way to diversify your holdings outside of stocks and bonds is in an investment property.
 
Steady monthly income – an investment property provides you with a steady monthly income if you choose to rent the property out and collect rent. At the very least it can pay the monthly mortgage on the property while you build the equity in the estate.
 
 
CONS
 
Maintenance – the maintenance on a property other that your primary residence can absorb a lot of time and money. Many buyers think a property will be easy to maintain and manage but fail to recognize the demand it can have when things around the home need attention.
 
Dealing with tenants – if you have not had the experience or background in managing tenants in a rental property, it can be easy to overlook the extent of the commitment.
 
Do your research thoroughly before diving into an investment property. Be sure to talk to a mortgage professional about the different requirements for qualifying for a loan on this type of property, as they are different from a primary residence home.

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