What is Investment Property?
It means a real estate property which has been purchased in order to get a return. In other words, any investment on the property which is made for the intention of earning money from it is called investment property. There are two ways to earning money from a property
- By rent
- By sale
By rent-out a certain property gives you rent every month which is earning against a property. As we know, property is the fixed asset and fixed assets are those assets which prices are higher, time to time, so it is the long term investment for the investor. An investor can able to earn huge money by selling the property to another. These two are characteristics of an investment property.
Is investment property can be a short term investment?
This will be happening for only those investors who only have an intention to buy property and re-sell it to another party. These investors doing property business and the main purpose not to hold property for a long period of time. This is the most popular business now a days. In many countries, people are doing for the sake of earning more and more money in a short period of time.
Are location matters in the investment property?
Yes, it matters a lot in the investment property. If you buy a property on the highway or main road, then it will be expensive than buying a property in the streets. The prices of investment properties near the school area are different than that of prices of the property near to your office. So, location is the key factor in this investment property.
Difference between commercial and residential property?
Have you heard about commercial property and residential property? as these are the common property words. Commercial property is those properties which are fully registered in the government sector as a business. These properties are more expensive than residential properties. These are powerful properties and have more weightage over residential properties. The residential property, as the name suggests, it is for the residence and it has lesser market value than commercial property.
What is the key factor in the investment property?
There are two conditions which must be fulfilled in order to say a specific property is investment property.
If you buy a property for the sake of earning money or property, then it is said to be an investment property. In another scenario, if you earn money from a property which is not you owned then it will be a property but not an investment property. Similarly, if you own a property but for own use not for rent or selling purposes, then it is also said to be a property but not an investment property. So, the above requirement must be fulfilled.
This investment property business is nowadays great business in those countries where there is inflation. When inflation occurs an investor will earn more money than before, so it is a great business for wealthy people.