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Income property is a property or piece of real estate that is bought and developed with the purpose of generating income by renting or leasing the property to others.

Furthermore, income properties offer the secondary benefit of asset appreciation, where the value of the property or piece of real estate grows over time. In other words, an income property is bought with the goal of generating cash flow from it.

Many refer to income properties as a form of passive income. Also, they also account for the costs needed to maintain the property or piece of real estate; more specifically, the income generated from an income property is calculated as the nominal revenues from renting/leasing the property, less the variable costs needed to maintain and upkeep the property or piece of real estate.

It is also important to note that income properties can be either residential or commercial. An example of a residential income property is an investor buying a house and renting it out to generate passive income.

An example of a commercial income property is an investor purchasing a shopping mall and renting or leasing the spaces in the shopping mall to those who wish to operate their businesses in the shopping center. The main goal of the investor would be to generate income from the rent and lease flows of the tenants, and the secondary goal would be the asset appreciation of the shopping mall.

Income Property Considerations

Investors must consider many factors when deciding whether to pursue an income property or not, including:

1. Source of financing

First, the financing for the acquisition of the income property is key. It is critical to analyze the optimal amount of leverage to use to purchase the property and whether the cash flows from the acquisition will be sufficient to pay off the debt.

2. Interest rates

The interest rate environment is important to analyze before making such a decision. If interest rates are currently high, the interest payments on the debt will be higher. Also, high interest rates will also affect the tenants and may put downward pressure on the amount of revenue that can be generated from the property.

3. Renovation, maintenance, and upkeep costs

In addition to financing and interest rate considerations, the renovation, maintenance, and upkeep costs of the property must be taken into consideration as they will add to the cost of the property.

4. Location of the property

The area in which the income property is located must also be analyzed to understand demand and pricing.

There are many more considerations to take into account before purchasing an income property; thus, it is important for investors to do their full due diligence before executing such a transaction.

Benefits of an Income Property

Income properties come with many benefits, including:

1. Tax write-offs

An important benefit is the ability to be entitled to tax write-offs. One of the largest vehicles for a tax write-off is the depreciation of the property or piece of real estate.

Most governments allow the investor to depreciate the property according to a depreciation schedule. The depreciation will decrease the investor’s taxable income, thus reducing the tax bill.

Other vehicles for a tax write-off are maintenance costs and interest paid on any debt; both methods help reduce taxable income.

2. Access to passive income

Another benefit is the access to passive income. Passive income is sought after as in normal times. Minimal effort is needed to keep the income stream afloat; however, it should be stated that there is a significant amount of upfront effort and costs.

3. Asset appreciation

An additional benefit to income properties is the chance of the asset appreciating over time and an investor being able to sell it for a higher price than which they bought it for.

Income Property vs. Investment Property

Income properties and investment properties are related in the sense that an investor purchases them to generate a profit.

An investment property is solely bought to sell it for a higher price than it was originally bought for. However, such an objective is just a secondary one for an income property, where the main goal is to generate rental/lease income streams.

Related Readings

CFI offers the Certified Banking & Credit Analyst (CBCA)® certification program for those looking to take their careers to the next level. To keep learning and developing your knowledge base, please explore the additional relevant resources below:

• Commercial Real Estate
• Industrial REITs
• Passive Income
• Types of Due Diligence

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investors searching for quality and stability. Investors, especially those getting closer to retirement, do not like or cannot manage the volatility of traditional investments. Rising interest rates mean bond prices are falling. The 10-year also dropped by over 50% to be more precise. Not to mention these are supposed to be your “safe” investments. The preservation of capital is more important than ever!

As investors look for quality, they are turning to real estate. Some benefits to investing in real estate in volatile times include finite, insured, an inflation hedge, you can add value to it and it can produce income. But there are some downsides to investing in real estate too. Tenants locking themselves out or trashing your house to name a few. Savvy investors see the benefit of diversifying into real estate, but they don’t want the headache that comes with it. That is why they are investing passively in other people’s deals. A passive real estate investment is when you invest in someone else’s deal and let them do all the work. These are known as real estate syndications. If you are looking at investing in syndications, here are 4 steps to underwriting the deal.

Underwrite the manager – This is hands down the most important piece of a passive real estate investment. A great deal can lose money because it is mismanaged. Or worse, the manager may not always be honest with their investors. Obviously, you want to invest in a team with experience. When I underwrite a manager or management team, it starts with getting to know them. I read the bios and then I want to speak with them and, if possible, meet them in person. From there, you can do all the normal steps which would include Google searches, references and double-checking past projects. I would do this same process for each individual manager of the deal. You would be surprised how often I find negative information about one of the managers in the group. I had one who served time for a white-collar crime. Don’t skip this step!

Financials – I like to see past and projected performance of the target asset. I am specifically looking at the manager’s plan for the asset and how they will be adding value. Past performance can be financial statements, but it is better to get tax returns. I will always run a comparable rental analysis so I can get an idea of the true market rent. Depending on the asset, you can get that info from websites such as rent-o-meter, appartments.com, CREXI and Loopnet. These numbers will be in the financials that you receive so I am only verifying what is being presented. I also examine current and projected expenses and try to poke holes. Can the new manager really do a better job than the seller or the old manager? Often, I see low projections with maintenance and loss reserves so focus on those.

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It’s no secret that after the impressive bull market that followed the pandemic sell-off in early 2020, 2022 has been a much more challenging year for investors. However, anytime markets are impacted by uncertainty, it’s a great time to buy attractively valued stocks while they are cheap, such as InterRent REIT (TSX:IIP.UN).

InterRent is a residential real estate stock that owns properties in Ontario, Quebec and B.C. It’s a real estate investment fund that operates in one of the most defensive industries there is, but also a stock that has significant long-term growth potential.

So if you have cash sitting on the sidelines, and are looking to take advantage of this opportune environment, here are three reasons InterRent is one of the best stocks to buy now.

InterRent REIT is one of the best long-term growth stocks you can buy

First off, InterRent is one of the choice stocks you can buy now due to the fact that it’s such an incredible long-term growth stock. Not only does it have an impressive track record, growing its revenue and funds from operations by 45% and 62%, respectively, over the last five years, but the stock continues to focus on rapidly growing its operations.

InterRent is constantly looking at how it can grow both its income and net asset value for investors.

This includes acquiring new properties which it deems to be undervalued but also investing in upgrading the assets it already owns to maximize their value.

It’s no secret that 2022 has been a tough environment for residential real estate as interest rates have been rising rapidly.

However, InterRent is committed to its growth strategy and will even take short-term hits to its occupancy rate in order to ensure that it continues to grow its average monthly rents at an attractive pace.

Therefore, it’s one of the safer stocks that you can buy now due to its incredible growth potential combined with the fact that even if its occupancy rate declines slightly, the stock is still incredibly defensive.

The stock pays a growing and sustainable dividend distribution

Because InterRent is constantly growing its business, it should be no surprise that it’s also constantly increasing the dividend distribution that it pays to investors.

In fact, over the last five years, the distribution has increased at a compounded annual growth rate of 4.7%.

With that being said, though, in general, the yield it offers is still lower than that of the majority of its peers. However, while that may not sound ideal, it’s due to the fact that the REIT keeps more of its funds to invest in growth.

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Trying to find the perfect house in Canada is an endeavour no matter where you want to live.

The nature of the Canadian housing market means that you often have to compromise on something, be it location, price, or even the features and quality of the house itself.

But, it also doesn’t have to be so hard.

To simplify your decision a little bit, Narcity sat down with real estate agent Trish MacKenzie to get a lay of the land and figure out the best place to buy a house.

And, according to her, the first thing you want to figure out is why you’re buying a house.

Ask yourself: “Are you an end user? An investor? A builder? Are you looking to be there long-term or short-term?” MacKenzie advises.

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1. Decide on a Trading Strategy

Before you buy your first crypto, you should define your strategy. When crafting your plan, you need to think about your availability, research skills, and experience. There are many strategies available, including scalpers (making multiple trades per day, usually for small profits), day traders, swing traders (usually making trades every few weeks), and passive investors, who buy and hold cryptocurrency for the long term.

2. Risk Management

The difference between pure gambling and cryptocurrency trading is risk management. Along with your trading strategy, you also need to clarify your risk management strategy and what tools you’ll use to limit the chance of losing money when trading crypto.

Examples of risk management tools include using stop-loss orders, thoroughly researching each digital asset before investing in it, and staying up to date with all relevant information regarding your assets.

3. Diversification

Just like with traditional assets like stocks, diversification will help you mitigate some of the coin-specific risks. Spread your capital among different digital coins rather than buying only one coin.

If one coin loses popularity, your portfolio will remain relatively stable. Some recommend investing about 1% in one asset – so, even if it plummets one day, it won’t take down your entire portfolio.

4. Don’t Buy Just Because It’s Cheap

Beginners or traders with a low budget may be tempted to make this mistake. Unlike traditional assets, cryptocurrency has no intrinsic value. Thus, its price is low or high based on demand and supply. Sometimes, cheap is cheap for a very good reason, so it shows you that there’s something wrong with the asset. Hence, it’s important to check the user rates and market capitalization before investing in a cryptocurrency.

In general, it’s easier to use a broker that facilitates access to these assets while providing sufficient information and support. Hence, your crypto trading journey should begin with a process of picking the right service provider for your needs..To find out how to trade cryptocurrencies, you can check out ThinkMarkets.

5. Don’t Invest All Your Capital

You should never invest money you can’t afford to lose – such as cash you need to cover your living expenses in the next six months. Even when you save money, especially for trading, you should still keep an emergency cash fund in case something goes wrong. Also, when buying one cryptocurrency, you should not invest all your money into it – even if the platform you use may urge you to do so.

6. Keep Emotions Under Control

Perhaps you’ve already heard of FOMO – fear of missing out. FOMO is responsible for most of the failing trades nowadays. FOMO can make people impulsive and afraid they’re missing out on opportunities. As such, they can be more likely to rush decisions and buy or sell without proper due diligence.

It can be argued that FOMO is one of the main reasons why crypto markets are volatile. It’s important to do your best to contain your emotions when trading – including fear or greed. It’s crucial to make data-driven decisions when trading or, in other words, to always base your strategy on facts rather than intuition or emotions.

7. Exit Strategies

Most altcoin traders have come to realize that the majority of coins have a relatively short lifespan. It’s not only important to know when to buy but also when to sell. After a certain time, most alternative coins can lose their value, so it’s important to keep an eye on the daily trading volumes and cut your losses early when it’s the case, rather than holding onto a losing investment.

Summary

All in all, the world of crypto trading is not easy, but it can be extremely lucrative. When trading crypto, you need to do your diligence and test your strategy thoroughly before risking your hard-earned cash. The crypto market is very volatile, so you may need to gain some experience before you potentially see the profits increase. No single strategy is perfect, so starting with due diligence and testing your strategy may be key to making informed decisions and keeping your capital safe.

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Three months after being elected into power, the Australian Labor Party (ALP) has finally broken its silence on how it’s planning to approach crypto regulation. 

Treasurer Jim Chalmers announced a “token mapping” exercise, which was one of the 12 recommendations in a senate inquiry report last year on “Australia as a Technology and Financial Center.” The report was warmly welcomed by the industry which has been anxiously waiting to see if the ALP government would embrace it.

Aimed at being conducted before the end of the year, the token mapping exercise is expected to help “identify how crypto assets and related services should be regulated” and inform future regulatory decisions.

Cointelegraph understands that Treasury will also undertake work on some of the other recommendations in the near future, including a licensing framework for crypto asset service providers dealing in non-financial product crypto assets, appropriate requirements to safeguard the consumer crypto asset custody, and a review of the decentralized autonomous organization (DAO) company-style structure.

In a statement from Treasurer Jim Chalmers, along with Assistant Treasurer and Minister for Financial Services Stephen Jones and Assistant Minister for Competition, Charities and Treasury Andrew Leigh, the government led by Prime Minister Anthony Albanese says it wants to reign in on a “largely unregulated” crypto sector:

“As it stands, the crypto sector is largely unregulated, and we need to do some work to get the balance right so we can embrace new and innovative technologies.”

The statement noted that more than one million taxpayers have interacted with the crypto ecosystem since 2018, and yet, “regulation is struggling to keep pace and adapt with the crypto asset sector.”

The politicians claimed that the previous Liberal-led government had previously “dabbled” in crypto asset regulation through crypto secondary service providers “without first understanding what was being regulated:”

“The Albanese Government is taking a more serious approach to working out what is in the ecosystem and what risks need to be looked at first.”

Speaking to Cointelegraph, Michael Bacina, partner at Piper Alderman, said the token mapping exercise will be an “important step” to bridge the significant education gap between regulators and policymakers.

“Australia punches above its weight in blockchain right now, but we have seen regulatory uncertainty lead to businesses leaving Australia,” he said.

Related: Australia’s world-leading crypto laws are at the crossroads: The inside story

“A sensible token mapping exercise which helps regulators and policy makers understand in depth the activities they are looking to regulate and how the technology interfaces with those activities should help regulation be fit for purpose and both support innovation and jobs in Australia while protecting consumers,” he added.

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Over the past year, crypto companies like FTX, Coinbase and Crypto.com have shelled out tens of millions of dollars to attract new customers. “Fortune favors the brave,” Matt Damon famously said in a Crypto.com TV spot as he tried to induce Americans to open their digital wallets.

Now a study of how successful they were has been returned, and experts say it’s an eye-opening one: not successful at all. The number of people who invested in crypto has not expanded since last September before the push began, according to the study, led by Pew Research Center.

The results, released Tuesday, build off an initial survey in September. Back then, Pew researchers asked 10,371 Americans if they have “ever invested in, traded, or used a cryptocurrency.” Some 16 percent of Americans said they had.

Last month, the nonprofit asked another sample group — slightly smaller, at 6,034 Americans — the same question. And again, 16 percent said they had invested or traded in the alternate currency.

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The S&P 500 climbed 0.3% after the benchmark index fell for three straight sessions. The Dow Jones Industrial Average added 60 points, or about 0.2%, and the Nasdaq Composite rose 0.4%.

Peloton (PTON) shares surged 20.4% after the company said it struck a deal to sell its fitness equipment and apparel on Amazon in an effort to turn its business around and regain investor confidence. The exercise-bike maker is also set to report earnings before the bell on Thursday.

nvestors are on edge over the Federal Reserve’s annual symposium in Jackson Hole, Wyoming later this week, where officials are likely to reiterate their commitment to fighting inflation and curb hopes for rate cuts next year.

Despite messaging from Federal Reserve speakers in recent weeks affirming rate increases will continue into the year end, the market is still pricing a dovish pivot, Baird Investment Strategy Analyst Ross Mayfield told Yahoo Finance Live.

“I do think that all of their jawboning and hawkishness over the past couple of weeks is starting to show up,” Mayfield added. “But you still have a market that I’m not sure quite believes they’ll stick to it as the economy slows through next year.”

At the end of the Fed’s Wyoming meeting, traders will tune in for remarks from Chair Jerome Powell for clues on whether the next policy announcement September 21 will result in another 75 basis point rate hike or an eased increase of 0.50%.

Meanwhile, shares of Nordstrom (JWN) plunged nearly 20% after the department store giant trimmed its guidance for full-year sales to a range of 5% to 7% Tuesday afternoon on slower demand and a buildup in inventory. The move comes just three months after the company raised its outlook.

“The lower-income customer segments saw significantly more pullback versus higher income segments,” Chief Executive Officer Erik Nordstrom during Tuesday’s earnings call, pointing to specific deceleration in the store’s discount Rack business.

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