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What constitutes a residential property investment?

Posted By: Ninfa Moseley..

Any piece of residential property that is not owner occupied is a residential property investment. The owner is the landlord, he is responsible for leasing the property to tenants or he turns these responsibilities over to a management company. Many people are introduced to the world of property investing by first purchasing a piece of residential property, gradually picking up the skills that are required to invest in larger and more complex properties and projects.

The basic unit for residential property investment is a single family home. Within the realm of residential properties are multi-unit properties which can be duplexes, townhouses, apartments or any other multiple user arrangement. The largest possible residential property investment is an apartment building which can easily contain hundreds of units.

Many investors in residential property soon find that managing their property can be time consuming and at times, frustrating. To allow the investor to focus on other opportunities it is common that the day to day management of the property be handed over to professional property managers who do everything from collecting the rent to arranging for trash collection. The landlord often finds that his time is better spent in finding now opportunities, arranging mortgages and insurance and keeping the taxes up to date and current.

The amount of money that can be made from residential income property depends to a great extent on whether the property is mortgaged or not. The size, condition, location also have a lot to do with the rent that can reasonably be expected to be paid. Any daily expenses that are made to maintain these properties are considered a write-off for tax purposes, no different than the expenses associated with any business. When the house is painted or repairs are made, the expense associated with the work is written off as a business expense.

Making a residential property investment can be tricky. The owner must take many things into consideration, things such as depreciation, local development and shifts in socioeconomics all come into play. A house that appears to be a perfectly good piece of investment property can quickly become a poor investment if the neighborhood should change. When an event like this, which is beyond the control of the investor takes place, what was a good investment, quickly sours. For more details, contact is dedicated to providing real estate investors with the tools and resources they need.

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