6 Benefits of Buying an Investment Property

By Kyle Koller

Producing Branch Manager of UMortgage West - The #1 Producing Team at UMortgage

Have you noticed more people talking about buying rental homes this year? At first glance, this trend might seem surprising against the backdrop of higher interest rates. However, when you crunch the numbers, it becomes clear why investment properties are on the rise.

Even a single rental home can significantly impact your financial future. Have you considered exploring this opportunity? Here are six benefits of buying an investment property:

1. Cash flow. When you own an investment property, your tenants are essentially paying your mortgage for you.

For example, if your mortgage is $1,600 and rent is $2,000, the loan is covered, and you’re left with $400 in monthly cash flow. That’s nearly $5,000 a year in extra income without working more hours or taking on a second job.

This is what people mean when they talk about “passive income.”

2. Appreciation and equity. Real estate is one of the only investments where your wealth grows in two ways at once.

● Appreciation: Over time, homes generally increase in value. A $400,000 home appreciating at 4% per year adds $16,000 in value.
● Loan paydown: While that’s happening, your tenants are also paying down your mortgage. If they reduce the loan balance by $6,000 in a year, that’s additional equity growth. Add those together, and you’ve built $22,000 in wealth in just one year, on one property.

3. Tax advantages. Owning rentals can mean thousands in annual tax savings. Investment property owners enjoy several tax breaks that can reduce their taxable income, including:

● Mortgage interest
● Property taxes
● Homeowner’s insurance
● Repairs and maintenance
● Property management fees

Plus, depreciation allows you to spread out the cost of the property over 27.5 years, which can offset income, lowering your taxable income, even if you’re cash-flow positive.

4. Buying power with financing. With as little as 15–20% down on an investment loan, you’re able to control 100% of the property. That means your money is working harder compared to leaving it in a savings account or putting it all into stocks.

Think of it this way: $80,000 invested as a down payment on a $400,000 property gives you the benefit of appreciation and equity on the full $400,000, not just the $80,000.

5. Built-in inflation hedge. As inflation pushes prices up, rents typically rise too. The difference is that your mortgage payment stays fixed if you have a long-term loan. That means your margin, the difference between your rent income and expenses, can actually grow over time.

6. Flexibility. One of the best things about real estate investing is flexibility. You can choose what works best for you:

● Long-term tenants: Steady, predictable rental income.
● Short-term rentals (Airbnb/VRBO): Higher potential returns in the right markets.
● Primary-to-rental strategy: Buy a home as your primary residence with as little as 3% to 5% down, live in it for a time, then later turn it into a rental.

You don’t have to lock yourself into one approach forever. You can adapt as your lifestyle and goals evolve.

It’s no wonder investment properties are trending right now. They provide cash flow, equity growth, tax breaks, and long-term wealth, all at the same time.

And here’s the best part: My team is licensed nationwide. Whether you’re in Utah or anywhere else, we can help you run the numbers and see if this strategy makes sense for your situation.

If you’ve been thinking about investing, let’s connect and map out how it could work for you. Book a free call with me using this link: Schedule a 1:1 call with Kyle. You can also reach me at (801) 687-2018 or kkoller@umortgage.com. I’ll walk you through the options and show you how real estate can start working for you.