One of the soundest investments that anyone can make is real estate. If you look into it, all investment opportunities such as business stakes, stocks, insurance and premiums, and the like have the risk of depreciating in marketability and value. Real estate, however, does not, it’s widely known as a commodity whose value doesn’t go anywhere else but up – this is because real estate is heavily owned by a select few as well as space doesn’t increase as the world’s population increases exponentially.
With this, if you have the funds and the capability to, it is advisable to get into buying and turning multiple properties into your assets. You will significantly increase your status of financial security and you’ll be able to potentially turn it into a source of passive income should you decide to rent or flip a home.
When you have multiple properties, there are a lot of responsibilities that come with it as well as benefits. Look into the following and decide for yourself if you think it’s worth it to buy multiple properties.
Increased Operational Expenses
Although these properties once turned into investment properties will be able to give you a profit, whenever it’s not being used or it’s still in the development stage, the overhead costs might be steep given that you have a lot of properties. For each property, you have repairs, upkeep, and renovation fees you need to settle which is a big amount to shell out and it might be a while before you see that amount plus profit return into your pocket.
To keep your costs for these repairs and upkeep at a minimum, it is advised that you have a constant contractor that you give out all your repair jobs – this ensures your costs are consistent and payment plans can even be worked out.
Source of Passive Income
Although it will be a long while for you to see your return on investment, once your property has either been sold or rented out and continues to be occupied, your return on investment and profit will come with almost little to no effort from you. Owning investment properties especially when they’re a lot will become your source for large amounts of passive income which you can reallocate to buy more property or use to beef up your financial portfolio once again.
This may just be the best thing about owning several properties. When you own several properties and declare a number of them investment properties or rental homes, you are allowed to deduct most of your expenses from your tax – this means that some of the operational expenses you shelled out will turn into an asset and you wouldn’t have to pay the full amount. The key to this though is the proper declaration of properties and proper filing of tax returns. Invest in a trustworthy accountant and trust us, you’ll be saving some pretty big bucks and make the initial amount you have to shell out before getting any profit lighter.
Liquidize Your Assets
One last thing to note is to ensure you have enough liquid assets left. Although yes, real estate is the only commodity whose value only goes up, it is still a long-running investment with a lot of risks. We do not advise in any way that you put all of your money and assets into investing in property. The financially sound thing to do is to have remaining liquid assets that you keep in an account separate from the ones you use for your properties to act as a cushion as you wait for the profit from the properties to start pouring in.
Having multiple properties, especially if it’s around profitable areas will be one of the smartest investment decisions you ever made. However, as you read this article, you’ll see that it’s not exactly clear cut and black and white, it takes a lot of energy, paperwork, and most of all time before you start to see the fruit of your investment.
If you are financially capable, we advise you to go into the business of buying and investing in properties and taking the proper steps to do so as it will surely set you and your kin up for the future. Remember: even when economies crash, the housing market still thrives. Whatever situation you’ll find yourself in in the next couple of years, having a few investment properties will surely keep you afloat.