Property Investment loans are just one of the many financing options that you as a real estate investor can take advantage of. These loans are specially designed for investment purchases and generally allow for higher loan balances than traditional mortgages and don’t even have a primary residence requirement like FHA loans. This means you don’t have to live on the property to be eligible for the loan. You can also use multiple real estate investment loans as you work on building a portfolio. With the FHA and other loan programs, you are typically limited to one financed property at a time.
Property Investment Advantages and Disadvantages
It is important to consider the profits and risks of an investment before venturing into it. Real estate investments are no different. You need to be aware of the pros and cons before investing money in a property.
Advantages of real estate investment
Tax Benefits – You can deduct expenses such as property taxes, insurance, mortgage interest, repairs, and improvements, and advertise your property and property management fees. You can deduct depreciation on the rental property annually, up to 27.5 years for residential property and 39 years for commercial property.
Real Estate Appreciation – Over time your property can increase in value and this increase in value allows you to sell for a profit.
The disadvantages of real estate investment
Capital and time spent – If you are the only or the main investor, you will have to devote a lot of resources to invest. This is especially true if you are new to real estate investing. It can take a lot of time and money to invest in your investment to pay off.
Financial risk – If the development is going south or if a long-time tenant leaves the property, payments will still be required. You need to be financially prepared if things don’t go as planned.