Tips For Investing In Multiple Properties
Investing in a home or property is less risky than investing in stocks and businesses. They are solid assets and are a time-tested method to build long-term wealth. If you wish to invest your excess funds and create passive income, it is wiser to invest in multiple properties. Your apartments in Karapakkam, combined with other rental properties can bring you enough income to cover your expenses and even fund the purchase of other assets.
Managing multiple properties is so much easier than owning a business as the time invested is less once the property is ready to move in. The risks involved are also less. If you don’t want to be burdened with managing the properties, you can always hire a realtor or any third-party property management service to do it. You won’t even need to look for tenants or buyers. A listing on any property site will bring you verified leads.
Multiple income streams
It is always beneficial to have multiple streams of income. It means your expenses and savings are sorted out for life. If you own multiple properties, you will keep reaping profits from flipping them, renting or leasing them, or simply selling them when you need to.
If you are in the Interiors business, you can always buy homes that are in the under-construction phase. You can furnish them and spruce up the Interior design and sell them for a higher listing than the actual market rate of the house. You can include the price of the value-addition you provide.
For those who don’t want all the hassle of fixing up the house, renting out residential and commercial properties is a great source of income. Rental income from properties like apartments in Karapakkam is quite high, as they are situated in the IT corridor. They attract an elite class of tenants.
You can also sell off properties whose value has sufficiently appreciated, and use the money to buy new properties in similar lucrative or in up and coming neighborhoods. You can also use this money to fix up existing properties and increase their market value.
Reduced Risk Management
A larger real estate portfolio diversifies and reduces your risk like no other investment can. If you are selling off multiple properties after flipping them, you can stagger the progress stages, so you aren’t pouring all your money into the projects. A sale can bring in income and money to fund your other projects. If a property requires more repairs, you can slow down the progress on it. Focus on the others, so they sell faster and bring enough money required to repair this one. Selling a property can take up to a month or more. Always have buffer funds in place to cushion you through the selling phase.
Having multiple properties rented out will give you coverage during transition periods. You will have at least one source of income even if other opportunities dry up or the sale of properties gets delayed. When more than one property is rented or leased out, your revenue is sorted even if one unit remains vacant, while you find a suitable tenant.
Multiple forms of income
There are several types of properties that you can earn passive and immediate income from. When investing in properties like apartments in Karapakkam, always approach a reliable and popular real estate developer.
Most developers give a rental guarantee that gives you assured rental income from the month the house is handed over to you. Having multiple rental properties in the same community also makes property management a breeze. If you are investing in individual homes, again it is better to invest in multi-family homes. It makes repairs and property visits easier.
Additionally, you can buy or build commercial properties and lease them for a fixed time period. This brings in bulk income that you can invest in other ventures. Commercial properties are in demand and their value keeps appreciating with the infrastructure growth in that locality. Make sure that your space meets the requirements of the business and upgrade regularly to keep up with the market.
Funding multiple properties
Buying multiple properties like apartments from Karapakkam or flats near Thoraipakkam from the same real estate developer can ensure that your mortgage or home loan process moves smoothly. Most developers are partnered with reliable lenders and nationalized banks. The loan is processed faster than when you approach a lending institution on your own. Typically people go for longer home loan tenures to bring down the monthly payouts towards it. But if you have a good cash reserve, close such loans in shorter tenures, as it will bring down the overall amount you pay towards the property.
Besides the home loan, you will need a down payment which can be anywhere from 10% – 20% of the sale value. You can secure private funding for this amount. But they come at higher interest rates than loans from nationalized banks. Alternatively, you can pour in funds received from the sale of or renting out other properties and assets.
Tax Benefits from Multiple properties
As per the Income Tax Act of India, 1961, the owner is eligible for tax deductions up to Rs. 2 Lakhs on interest, if they secure the house through a home loan. Additional properties are taxed as per the norms, irrespective of whether they are occupied by members of the same family or by unrelated tenants.
However, the owner can claim the paid municipal taxes as tax deductions against these properties. The interest on any property bought with a home loan can be claimed as tax deductions with no upper limit.
If the additional properties have been rented out for commercial use, then they are taxed on a case-to-case basis. If the income is clubbed with other asset incomes, then it is taxed as income from different sources as profits from a business. In case the rent or lease amount can be distinguished from other income from that asset, then it will be taxed on the rent only.
The following are the claimable deductions that can be made on multiple properties.
Standard Deductions: 30% of the Annual value of the property can be claimed against expenses like property insurance, maintenance, and repairs, etc. It can be claimed even without evidence for said claims.
Deductions on Municipal Taxes: All municipal taxes paid towards a property can be claimed as Tax deductions.
Home Loan interest: The interest paid towards home loans is exempt from taxes.
Urbando is one of the top real estate developers in Chennai, with premium apartments for sale in OMR. Our projects are located in prime areas with convenience and land-value appreciation in mind. Find the best property investment deals by connecting with our personnel at +91 7358222318.
