If you are looking for properties to purchase a new home, then why not your first home be an asset? Yes, an asset which is an investment property. In an ideal world, people buy rental properties at some point in their lives. Most of them wait for a long time until they bought their first home and start investing in a second home, which is an investment property. You could even start sooner than that to invest in an asset rather a first home which takes money out of your pocket all your life than making money for you. Know how an investment property really works in generating income despite both types of property’s legitimate responsibility is yours directly or indirectly. Here are some reasons to show you buying your first home as an investment property is the best option for you.
The traditional notion of an Indian goes like this
The thought of buying your first home as an investment property might go beyond the regular Indian life practices. It might be a different approach after you graduate from college. Usually, the personal financial life a person goes like this.
He graduates from college and gets his first dream job. Then he starts looking for a small rental apartment. He gets married once he attains stability at his workplace and income. Buys his first ever home in a posh locality like the independent villas in OMR. Meanwhile, a child is born and takes care of its education. This is where he thinks about a second home as a rental property.
This is one way of the personal financial approach of a normal person to save, build a good credit score, buy a home and invest in a second home waiting till he enters his 40s. Why not a different approach to starting this out at the early age 22? Waiting for a long time until you hit your 40s to invest in a rental property might not be a wise choice. This is where investing in young age scores more credit.
Here are some reasons to show you buying your first home as an investment property is the best asset option for you.
You start ahead of the rest
Effective management of your money and spending at a young age can come up with sufficient cash for your down payment. Being young is advantageous as you can save money and build good credit to get approved for a home loan as well. As most youngsters live with their parents until they move out to live in rental apartments. This is the time where you could save money enough for a down payment to buy your first investment property.
Not all real estate properties are expensive
Buying properties from newly constructing projects might be expensive. Rather have you heard of the distressed properties? Distressed homes are the properties of payment defaults by the borrowers. The bankers through e-auctions sell these homes. Usually, these types of homes could benefit you from discounts. They most often come with a cut down cost. Out of plenty of distressed homes on sale, buying one would fetch you a chance of owning an investment property at a young age without even going through the usual phase of buying a new first home. Remember to strike a good deal and check out any issues with the legal titles and deeds if exists as it might put you at risk later.
An additional source of income
If you are planning to purchase a property for rental purposes, it is undoubtedly a wise choice. You likely able to gain profits as soon as you find new tenants to rent out your property. For instance, Mr Ramesh bought a 2 BHK apartment for sale in OMR Chennai for a reasonable price and started renting it out. He earned money through rentals and paid off his other debts and bills.
The cash flow is endless
In case you bought the first property on credit, then it might take up many years to pay off. But when you rent out the property, you can still continue to rent the property as your loan debts are finally paid off. After the debts come to an end, you could continue to make money after you own the property completely, and then the income fills in your pockets.
Your wealth is likely to grow over time
Your wealth would possibly grow during inflation, which benefits you by the increase in the property value, or the annual increase in rental income. Over time these benefits would become higher and you could focus on something bigger than this.
Your income stream is diversified
Having various separate streams of income is a safe and reliable way to save you if you lose one of them. For instance, even if you lose your job, you can still earn income through the investment property to a safe-balance your life. Meanwhile, you can find another job sooner. Wholly, first home as an investment property is a smart investment