Why make your first home purchase an investment property, some insider secrets
If you don’t have sufficient income or deposit to purchase your first home and live in the property, then you can still consider investing which may increase your borrowing capacity, allowing you to secure a property in an area you like and use the rental income to support the loan until such time as you can afford to live in the property. All it takes is a little bit of smarts and real estate shrewdness. Here are a few reasons why your first home should be an investment property:
You’ll Have Another Source of Income
If you are purchasing a property that you plan to rent out, you’ll be able to profit off your investment as soon as you find tenants. Then you can take the money you earn and reinvest it in your property or use it to pay off other bills and debts.
Potential Appreciation of a Highly Leveraged Asset
Leverage, in layman’s terms, means you invest a relatively small amount of your own money, and borrow the rest, often four to twenty times more, from a lender. If you purchase a property using significantly more debt than equity, the investment is said to be “highly leveraged.”
Huge Tax Write-Offs for Income Property.
As a rental property owner, you are entitled to huge tax deductions. You can write-off interest on your mortgage or on any credit cards used to make purchases for the property. You can write-off your insurance, maintenance repairs, travel expenses, any legal and professional fees, and even your property taxes.