Properties In Alamo

Alamo Properties

An income property can be a great way to supplement your current income and to invest in your future!  But, investing in property can also bring with it a lot of headaches and hassle if it isnt carefully considered ahead of time. Following are some of the pros and cons of owning an income or rental property.

Cons
While buying a property may not be difficult (especially if you have a good real estate agent) running a property is a whole different matter. Dealing with finding renters, rent fees, neighbor complaints, property damage and upkeep can be a full time job. 

Knowing this, many owners (especially those with multiple properties) employ a manager to look after their income property/properties.  A property manager is often responsible both for finding tenants and maintaining them - two difficult tasks that the owner then doesn�t have to worry about.  However, managers do not work for free - you will need to factor their salary into the amount you are able to invest in a rental property.

Another potentially negative aspect of owning a rental property is the continual cost of maintenance, costs that can quickly add up!  Cleaning costs between tenants, new health and safety codes, and the regular wear and tear associated with people constantly moving in and out are some things to consider when buying an income property.  Are you including these costs as well as some unexpected ones like the cost to replace a broken furnace or leaky roof into your budget?  Some damage can be prevented by carefully screening tenants but it is often difficult to tell what kind of people they are before they sign a contract and move in.

Depending on the market, finding a tenant could be difficult.  There is always the possibility that your income property may not generate income at all if it has to remain empty for any length of time.  Consider the market at the time you are planning to purchase your property in order to assure that it will add to your income, not subtract from it!

Pros
If you manage to avoid some of the above mentioned problems, your income property could turn out to be a great investment in your future as well as a very lucrative business.  One significant advantage to investing in real estate is that it generally appreciates over time.  Depending on the area in which you are looking to buy, you could make a tidy profit from your property in just a few years time. The additional benefit for a rental property is that during the time in which your initial investment is appreciating, you renters are paying off the mortgage for you!

There is also a major tax advantage to owning an income property.  While your profit is still taxed, by technically being a business, you have access to the many write offs available only to businesses.  However, it should be noted that if the property is vacant, then you can not take advantage of these write offs.

Many of the people who purchase income properties are thinking of the future.  Not only does a rental property provide a relatively stable fixed income but it is also a great way to save up money for retirement that is not related to your daily income!

Purchasing an income property can be a great investment in your future but it should be approached with a wary and knowledgeable eye as there are many potential pitfalls. 

Seek the knowledge and guidance of your local real estate professional to help you avoid any disasters during the process of purchasing your income property.

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