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Buying Prescott Income Property
and Residential Real Estate |
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Purchasing real estate is an effective
long-term investment strategy. |
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There are several types of
residential income-producing real estate, each offering
different levels of revenue potential and carrying varying
degrees of risk.
The most basic of these types of
real estate include: |
- Duplex (two units)
- Triplex (three units)
- Fourplex (four units)
- Rooming house (many rooms with shared kitchens and
bathrooms)
- Low-rise apartment building
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Mixed-use commercial and residential
- Properties that need to be fixed up for resale
Whether you are an investor who is looking to
purchase a property that nets you a profit each month or a
home buyer who wants to find a smarter way to bear the cost of
home ownership, we have the information you need. |
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Buying Prescott Income Property as an
Absentee Investor |
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Why invest in
prescott real estate
that you will not live in? |
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Cash Flow: Rental incomes generate positive
cash flow - the monthly net proceeds after all
expenses and carrying costs on the property. -
Leverage: Income properties allow for
positive leveraging - a situation where the yield to
an investor exceeds the overall rate of return that
would have been realized on a property had no
financing been put in place.
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Return on Investment: The intention to
achieve a strong R.O.I.- the dollar amount returned on
an initial cash investment expressed as a percentage.
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Capital Appreciation: The potential for
capital gains if the property can be sold for more
than was paid for it.
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Tax Benefits: Potential for tax benefits by
writing off mortgage interest against income. Also,
capital gains on reversion may be taxed at a lower
rate than other forms of income.
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Tax Benefit Potential: Gained by writing
off mortgage interest against income. When you sell,
capital gains may be taxed at a lower rate than other
forms of income and there may be tax exemptions if the
property is the principal residence.
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Beat Inflation: Land becomes more valuable
every year. As your property appreciates, it can
provide a good hedge against inflation.
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Buying Owner Occupied Income
Property in Prescott |
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Why choose to own and live in a building
with tenants? |
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Cash Flow: Rental incomes generate cash
flow from other units in the building. That income can
lower or completely offset property expenses and
carrying costs.
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Location: Income properties may allow
individuals to live in neighborhoods that they may
otherwise not be able to afford by reducing the
monthly carrying costs of mortgages.
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Accommodations: Inhabiting an income
property may allow individuals to live in a larger or
more luxurious unit that costs less than if they were
renting the same unit. -
Mortgage Eligibility: A lender in assessing
eligibility for a mortgage may use the income from a
property and allow buyer to purchase a much larger
property..
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Capital Appreciation: The potential for
capital gains if the property can be sold for more
than was bought.
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Tax Benefit Potential: Gained by writing
off mortgage interest against income. When you sell,
capital gains may be taxed at a lower rate than other
forms of income and there may be tax exemptions if the
property is the principal residence. Also, you
may be able to get a depreciation benefit on the
rented portion of your property (check with you tax
advisor). -
Beat Inflation: Land becomes more valuable
every year. As your property appreciates it can
provide a good hedge against inflation.
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Gain Experience:
Managing properties and tenants in Prescott or any
other place requires many skills including
negotiating, background checking, advertising and
marketing, contract writing, escrow management,
handyman, and many more. Starting with a
property that you live in is a great start and you can
be "on top" of things. | |
