An investment property has the potential to become a tangible source of income over the years – but the benefits go beyond basic rentals or re-sales.
If your investment property is close to local businesses, in a popular commuter town, near a transportation hub, convenient to local employers or features access to popular amenities, you could see a good cash flow from renting. Rental income can offset – either partially or fully – the costs of your mortgage, as well as expenses like utilities, maintenance costs and homeowner association fees. Your goal as an investor is to have income on top of these offsets.
Tax benefits on investment properties can include mortgage interest and property tax deductions. In addition, depreciation options may provide tax benefits. Consult with your tax advisor to learn which ones might apply to you.