Sometimes a question is asked as to why people buy another property. The idea is that investment houses give you one of the best retirement incomes you can have. By purchasing income properties now will get you a good retirement fund over the next ten or so years time.

Here is an instance. Let’s say the average person owns their own home that they reside in and they are paying a mortgage on it. There will also be other bills to pay out as well such as the council tax and bills on electricity and gas. The homeowner will need to work to stay on top of the bills and keep up with the mortgage payments. Income tax also needs to be paid from your job which also eats into your income. On all the bills you have to pay as well as your income tax can be as much as two thirds of your income. Leaving a person with only a 3rd of their wage left for normal living cost and lifestyle.

Many hang around for the end of the mortgage term to just pay off their own mortgage. Nevertheless that still means there are the other bills left to pay. This means you still have to keep your job to pay the bills.

So the answer is to have another passive income source. The source will get you money repeatedly all the time. This is why having income producing properties is essential. Even if you have a mortgage on the income properties, you just have to make sure that the rent that they are producing is more than the cost of the mortgage.

Over the years your rents will go up with inflation and the properties could gain in value. With an extra three or four extra properties all pad off at the end of the repayment term will pay you a good income. The cash earned from these properties should be sufficient to pay all your utility bills and give you a lavish liifestyle

The reason for using properties for passive income rather than other traditional businesses is that there is very little hands on work to keep it running. Maintenance folks and agents can do all the renting for you. This means the cash can roll in while you are not there. I am capable of being in some accommodation in Barbados and still earn money. Maybe you fancy that sort of situation too, that you be lying on the beach on a Barbados All Inclusive holiday, while your properties are providing your income.

Tagged with:

Filed under: Benefits of Home Ownership

Like this post? Subscribe to my RSS feed and get loads more!