Understanding income generating properties

You probably know someone, a friend or a family member, who owns one or more income generating properties and they’ve gotten your attention especially, once they started explaining how this simple financial move was the best decision they’ve ever made since it improved their financial well-being and gave them the financial flexibility they were looking for.

As a newbie, you’re still unclear about such an investment?

And you’d like to find out more.

Let me ask you this…

Do you know how to invest your money?

There are endless ways for a person to invest their money such as the stock market, investment bonds, mutual funds, savings accounts and the list goes on and on…Investment options

When my husband and I started investing in real estate back in 2015, our savings were hidden in bank accounts that barely generated any profits in a year.

We were told our money would be blocked in mutual funds and savings accounts and will generate 4 % in profits within 3 years.

We didn’t know better at the time since we hadn’t discovered real estate investment opportunities.

It wasn’t until a family member approached us with an opportunity and we now own two triplexes and a sixplex and we see profits on a monthly basis.

High investment returnI’m talking 10% return on your money on annual basis and higher.

Now, this is exactly what I call the advantage of income generating properties.

What is an income generating property?

Simply put, it is a property you buy or you build in order to start earning income with.

These income generating properties can be residential, for example a single family home or multiplex (i.e. Duplex and higher), or commercial, for example a mini-mall.

Once you own such property, you can then rent it out on a nightly, daily, monthly or annual basis or you can sell it and make profit once the value of the property goes up.

Understanding income generating propertiesNow that you understand what an income generating property means, you’re wondering why owning such a property is a great investment?

Why an income generating property is a good investment?

Here are some simple reasons why you should invest in an income generating property.

Cost of living

Home prices are continually rising based on recent reports from the National Association of realtors.

This is the perfect time to invest in an income generating property to help you live stress-free.

If you are buying an income generating property and you plan to rent it out, good for you. You’re on the right track.

Life is expensiveIf not, think about the profit you’ll be missing out on as soon as you find tenants, which is a great income to either reinvest in your property, buy another property or spend on yourself (i.e. pay bills, travel, etc).

So, if your plan is to buy a house to live in, you can still do so by buying a house you can afford as to avoid debts and/or bankruptcy and have plans to rent out some space (i.e. rooms, basement, parking space, etc..) to help with cost of living especially if you are young and single.

You can easily find bargains when you hire an experienced real estate agent as there are homes you can buy under market value and these homes are called distressed sales due to foreclosure so banks are trying to get rid of them as fast as they can.

Down payment

Down Payment

Banks are usually more willing to lend you money to buy a property if it is an income generating property since they know there will be tenants to pay the mortgage and chances for bankruptcy are lower.

When you decide to buy an income generating property, you are required to provide 20% down payment if you’re not planning to live in the property.

If you do plan to live in it, 5 to 10% down payment will do and you can apply with any bank you wish.

Down payment assistanceIf you have a bad credit, the Federal Housing Administration Loan exists to help you become a homeowner and can finance your purchase.

All you have to do is live in the property which is a plus since you can live almost for free depending on the price of purchase especially if it’s a 3 unit and up property.

The other tenants will pay your mortgage and other expenses.

Plus, when you’re living in your property, you will save up on some services such as snow removal during winter, gardening during the summer and tenant visits and such.

Important tax write-offs

I think that this is the most important point.

There are so many tax write-offs to take advantage of when you own an income generating property.

Tax write-offsYou can literally claim so many deductions which do not apply if you own a house and live in it.

For example, renovations to your property and maintenance repairs; insurance costs; interest on the mortgage; interest on credit cards or any line of credit used for purchases related to the property; legal and professional fees; property taxes; etc..

Also, there is the possibility of offsetting any income made with the property using the depreciation expense of that property.

This helps avoid paying taxes on the rental income.

Make sure you speak with an experienced accountant to better understand how to use your property to write-off income tax.

Interested by an income generating property?

If your goal is to live comfortably and not have to worry about having enough money to pay your bills, then investing in an income generating property is a great idea.

Speak with financial advisorSpeak to a financial advisor is a must to help you better understand all the options available to you.

You can also reach out to individuals who already own such properties (like myself) to learn all the ins and outs.


I hope you enjoyed this post and if you have questions or concerns, you can leave them in the comments below and I’ll be glad to respond.

Have a great day!

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  1. This is a fantastic article! Long ago, I worked for a realtor and there were always people looking for rentals. Not everyone is ready for the responsibility of ownership. I used to look at some of these houses and think how much fun it would be to fix them up as rentals or even to flip. People are always looking for someplace to rent, since buying a house can be so intimidating for some. I wasn’t even aware of all the tax write-offs! Amazing information. Thank you for posting!

    1. Hi Cathy,

      Thank you for your comment. Indeed, ownership is becoming more and more hard to achieve especially for first time home buyers.

      unfortunately, there isn’t enough information available for those who would like to make the jump into real estate investment and they miss out on so much. I’m glad you found this post informative.


  2. I always thought that this was an interesting idea but I never believed I had the money to just buy a place to try to rent out or fix up and sell.  This was very informative and I enjoyed reading it.  Thank you for the info, it was a good read!

    1. Hi Annie,

      Thank you for your comment. I’m glad you found this post informative and I really hope that one day you will become a real estate investor.


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