Financial Resource Center: Visit our financial resource center for information to help support you through the unexpected

How to Get an Investment Property if You Already Own a Home

by | Sep 5, 2018


With housing prices reaching an all-time high, many people are having regrets about not buying property earlier. The general consensus is that owning a home seems to be a great investment because of the spike in selling prices.

How an Investment Property Can Benefit You

Having an investment property can benefit you in several ways.  It can offer you a sense of stability and security in the future. When the time is right, you can sell it and earn a profit. In the meantime, you can use it to open up another flow of income by using it as a rental.  This provides immediate return on your investment. Because you are renting out a place to live, chances are you’ll have tenants staying for at least several months.  You are getting constant return with little maintenance. All you have to do is pick up the rent check each month! Depending on the area, you can even increase the rent if housing prices are going up year after year.

Here’s the Deal for Homeowners

If you’ve purchased a home around 2011, you may have a decent amount of equity. If you’ve purchased your home even earlier, that’s even better. It sounds crazy to purchase another piece of property when you’re already paying off a mortgage.

But there’s something you may not realize:

You can use your home to pay for the down payment. You’re paying off your mortgage month after month. It’s about time your house did some work for you, right?

Right.

Home prices have skyrocketed in the most recent years, making it a seller’s market. While housing prices are expected to eventually go down, it might not happen for a while. Housing prices are still expected to climb. This means there’s still time for you to invest in an investment property and gain some equity.

OK, So You Might Be Wondering:

If I’m already a homeowner, how can I afford an investment property when I’m already paying for my current home?

The answer is: use your home to pay for the down payment.

If you’ve been current on your mortgage payments and have enough equity, you may qualify for a cash out refinance. You can take the money you received through your refi and use it to cover the down payment costs.

Basically:

You’re the owner of the property, but someone else is paying for it. It gets even better. Since you are the owner of the property, you’re the one who gets to benefit from the tax deduction! You can deduct the mortgage interest, the property taxes, repairs, etc. You cannot, however, cannot use renovations as a deduction.

If you find in the future that the timing is right and you no longer want to rent, you can sell your property and walk away with a profit. You can even move into your investment property if you want to and sell your previous home. If you have children, you can continue renting it out and keep your investment property for them so they’ll have something in the future.

Whatever the case, there are lots of options and benefits to having additional property and it’s not as difficult as you think to get one.

Latest Articles

Top Ways To Cut Cost On A Kitchen Remodel
Top Ways To Cut Cost On A Kitchen Remodel

The kitchen is the most-used room in your home.  This means it should be comfortable and convenient. If it's not, you might want to consider making some changes (that will more than pay for themselves in the long run). But how much does the average kitchen remodel...

2020 Top Bill Negotiation Services: What To Know
2020 Top Bill Negotiation Services: What To Know

Modern bill negotiation services use their expertise in the industry to help you better deal with some of the most common bills you pay monthly, without any upfront costs. If you are like most people, you are probably concerned you are paying too much for services....

What Are Debt Relief Programs And How Do They Work?
What Are Debt Relief Programs And How Do They Work?

Research shows that consumers hold a collective $14 trillion in debt. Are you included in that statistic?  If so, it's easy to become overwhelmed by your obligations. Many different kinds of debt can threaten your financial stability, from credit cards to student...

12 Credit Card Companies Offering Financial Relief
12 Credit Card Companies Offering Financial Relief

The month of March brought a load of unanticipated turmoil to the United States with a record of 6.6 million Americans filing for unemployment benefits due to the spread of COVID-19. Even with a lot of budgeting and saving, it may be difficult to recover from the...

What to Do If You Can’t Pay Your Utility Bills
What to Do If You Can’t Pay Your Utility Bills

In recent weeks, families around the world have been thrown into a new normal. For many, this time has also introduced a new season of financial hardship. Maybe your hours were reduced to part-time as your company works through these unsettling times. Or, perhaps you...

60-Day Foreclosure Moratorium: What To Know
60-Day Foreclosure Moratorium: What To Know

If you're struggling to keep your head above water because of COVID-19, you can breathe a sigh of relief. The federal government issued a foreclosure moratorium in March 2020 to help everyone affected by COVID-19. HUD Secretary Ben Carson will oversee the new mortgage...

Pin It on Pinterest