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Rental or Investment Property?

rental-300x225One of the best ways in which you can invest your savings for long term returns, without the fuss of too much paperwork and comparatively less risk, is real estate. The avenues for real estate investment or putting money in investment property are numerous. The most common are rental properties and general investment properties. There are many advantages to owning a piece of investment property- the returns are steady, there is much less technical know how needed and learning time to master property management is relatively low. The challenges, however, begin when you choose where you want your money to go- a house or a piece of investment property.

Rental property

A house that you can rent out as a place of residence. A rental property cannot be your second home and you cannot live in it. As long as you find the right tenants, you can be rest assured that you will get monthly payments in the form of rent and maintenance is not very high. Tax write offs are also possible when you own a rental property.

Investment property

There are two major types of investment properties that you can purchase- one, for commercial use and the other to ‘flip’ or quickly resell for a profit. If you are going in for a commercial property, it can either be a store, a restaurant or an office. There are, based on where you choose to purchase your investment property a good chance to get healthy returns. Eat outs, delis and restaurants normally bear a slightly higher rent than offices or stores, but maintenance will be higher.

Both rental as well as commercial properties can be fruitful in the long term, but it would do you good to consider both the pros and the cons that come with it before purchasing your investment property.

Image courtesy of [Anoop Krishnan] at FreeDigitalPhotos.net

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