Investment properties are usually a land or building that is not occupied by the owner and is geared towards profit by means of renting or leasing the property. It is a land that is held for long-term profit generation and capital appreciation. Investment properties are also lands or buildings that are held for undetermined future purposes. They can also be off-plan properties that are still being constructed for future use. One example of these properties are high rise condos, which are gaining popularity in real estate. Investment properties can range from resorts, golf courses, ranches, and gated villages.
The opposite of investment properties are non-investment properties. These are properties that do not generate income based on the use of the property. Examples of non-investment properties are lands and buildings used for manufacturing, production, and supply of goods and services purely for administrative purposes. These also include properties leased to another party under for finance leasing. Properties that are occupied by the owner are also non-investment properties, and includes properties under lease which are held for future use of the owner, and properties that are being used in present time but are awaiting disposal.
It is important to differentiate between investment properties and non-investment properties because the taxation for the two types of properties are different.
When buying investment properties, it is wise to do some research on how profitable the properties are. Key areas that are valuable when it comes to investment properties are those that have high levels of employment. Central business districts are good areas to establish investment properties because of the high flow of cash and income high level of income of the people nearby. There will always be available tenants in the property who can afford to pay for the higher expenses of living nearer to their workplaces.
Another good area to consider when buying an investment properties are near universities with high student population. A key indicator of the purchasing power of the students in a certain university is the amount of their tuition fees. Affluent families who can afford to send their kids to expensive universities will likely be able to afford a place to rent in nearby areas of the school. Likewise, it is not wise to buy investment properties like hotels and condos near a residential area, because there will be a lack of need for nearby people to rent a condo.
AnotheAnother factor to consider when buying investment properties is the availability of basic commodities in the area. Malls, convenient stores, quick and easy access to cheap transportation, are some of the basic necessities that raise the value substantially.
For beginners in the business, start with something small like apartments, small commercial buildings, and even mobile homes, because they are simpler investments compared to condos, hotels, and other bigger investment properties.
Once you have your investment properties, the next thing to do is to market the availability and convenience of renting and leasing your property. The best thing to do here is to hire an advertising agent to make the property visible and attract potential clients. Buying investment properties is one of the most profitable businesses today.