Investment Properties: Diversifying through Real Estate
You have probably heard someone say, "You need to diversify your portfolio"... But what does this mean? Diversification refers to where you invest your money in products like stocks, bonds, and IRAs. Another way to diversify is to invest in real estate through investment properties.
You can create income with investment properties by leasing or renting the property to others. Owning these types of investments can provide tax benefits and increase the value of the properties over time.
You may already be familiar with tax deduction benefits for your primary residence, but did you know the same holds for your investment properties? A key difference between owning investment properties is that you can deduct more expenses from your taxes than your primary residence. Investment properties can also create a long-term revenue stream through tax deductions and rental income to give you a steady income for many years to come.
What are the kinds of investment properties?
Fixer-Uppers can be a great way to lower the initial investment or purchase price and help you to maximize your return on investment. If you are handy and can do repairs yourself, you can also save money. I plan to hire out repairs; remember to consult with multiple companies to bid for the needed repairs, which will help reduce your overall cost.
When first exploring Investment properties, it is essential to understand the differences between a Single Family vs. a Multi-Family home.
A single-family home is a standalone, independent house used for one family, person, or household. There are no shared spaces and no common walls or doors, or shared utilities. It's a free-standing structure in a neighborhood or community.
Multi-family houses contain separate residences for two or more families, domestic partners, or roommates. Multi-family homes include small apartments or duplexes with up to four units.
If you or someone you know is thinking about buying a home or wants to explore the possibility of purchasing an investment property, have them reach out to First Integrity Mortgage Services in St. Louis, Missouri, today.
For more information about the process or if you have any questions or comments, please get in touch with Ron Hendrix, NMLS# 2001001, at (913) 219-4587 or rhendrix@firstintegrity.com.
First Integrity Mortgage Services is licensed in Missouri, Illinois, Kansas, Arkansas, and California.