Investment Property
Definition of "Investment property"
* Conditions Apply. Call for Details real estate agent' title='Your Home Sold Guaranteed Or I'll Buy It! 
The investment property definition is pretty simple: it is a property which its main purpose is not sheltering/housing its homeowner but acting as an investment asset.
The ways an investment property can bring return to investors are either instantly through rental income or over time, when the homeowner sits on the property until the value appreciation of the area is good enough for him (or her) to sell it, making money off of the interest appreciation – bought a house at $200,000, sold for $500,000 profiting $300,000 off of that investment. It can be both too: someone that, while waiting for the house to appreciate its value, rents the investment property to make money. Or even a rent with option to buy property.
However, the investment property definition can get murky when you buy second homes. Say you are a snowbird from Boston that buys a home in Florida to run away from the winter. While the rest of the year you use the southern home for airbnb renting, making money off of it like an investment property, you do live in the place for about 4 months a year. Does that make the house an investment property or not? And does it even matter what name is it called?
Actually, yes.
Investment properties, for instance, can’t benefit off a mortgage insurance, as insurance companies only provide a mortgage to primary residences. And that includes Federal Housing Administration (FHA) loans. Not to mention tax exemptions a vacation home cannot bring.
So there are a bunch of factors that determine if a home is an investment property or not – like the distance between the primary residence to the second home and even just to name one. It will depend on the loan originator and the story you tell them.
Real Estate Advice:
Have a chat with your real estate agent and a financial advisor so you don’t learn down the road that your money is going down the drain and you could be profiting much more.
Popular Real Estate Terms
That which remains. As applied to real estate, it is the profit derived from rentals after subtracting all operating costs from the gross rental revenue. ...
The definition of low-income housing is any house that is either rented or owned by an individual or family that has a monthly household income that does not exceed a certain percentage of ...
Among other things. Inter alia is an ancient method of referring to statutes without reciting all of their provisions. ...
The term’s balance sheet definition can be described as a financial statement that a company uses to report its liabilities, assets, and shareholders’ equity at a given time. A ...
Nonload bearing layer of brick covering a wall of decorative purposes only. The wall is usually constructed of wood framing or masonry block. ...
An amount of money provided for in a contract as compensation if the contract is not fulfilled. An example is an offer to buy real property that includes a provision that once the seller ...
An interest rate charged on a loan that exceeds the legal maximum interest rate within the state. It is illegal to do so. The maximum interest rate may depend on the type of lender and ...
Statutes stipulating that the property of deceased individuals is distributed in a way that assumes that property during marriage is jointly owned and equally shared by the spouses ...
Ambiguous contractual language that may result in an unsuspecting buyer of a real property incurring obligations or risks not clearly evident. ...
Have a question or comment?
We're here to help.