The returns from property investment usually come from the rental income and also from any enhancement in the property value with time. The property has got two prospective returns. One return is from the rent paid by the tenants and the other is from the property increasing in the value known as capital gain.
The property investments are not taken to be liquid as we cannot withdraw our investment fast. In order to get the money, we have to sell the property or enhance the mortgage. This may not be simple and there might be some additional expenses like real estate fees.
People purchase investment properties to make long term profit as the prices elevate. There can be little or no profit from the rent after costs such as insurance, mortgage, rates, and maintenance are considered. In case we sell within two years of purchasing, we will need to pay the income tax on that particular sale.
Making investment in the property
It is generally difficult to borrow money for a rental property rather than your own home. There are some of the lenders have got lower lending limits fo the investment properties. The lenders will see what we can afford to repay when we borrow for the Property investment opportunities. The mortgage brokers have got some specialization in lending for the investment.
Property investment has some more work than saving the money in the bank or making the investment in the shares and also the managed funds. Many of the investors spend a great deal of time searching for good properties to purchase, finding and managing the tenants. A property manager will do some of important work in return for a percentage of the weekly rent. The manager will take the tasks of finding the tenants and gather the rent and bond. You can deal with the various maintenance problems.
We may invest in the managed funds that purchase and sell the commercial property. These funds may have own properties like office buildings, factories and also the shopping centers in a direct way. You may own the shares in other funds that have the property. We get some income in case the managed fund makes some profit on the rents it gets or sells the buildings or shares at a profit.
We can get a capital gain in case the fund price has elevated by the time we sell. It has been seen that the property funds provide us the benefit of property ownership to find the property and do the management on our own. They make it feasible for the small investors to own a varied portfolio of commercial property and had a varied cycle of ups and downs to residential property.
Investment property is the real estate property that has been bought with the intent of earning a return on the investment through rental income and also the future resale of the property. Property investment opportunities can be a longer duration or short term investment. There are innumerable property investment opportunities for you.