Joint Property Investments: Pros and Cons for Married Couples

Joint Property Investments: Pros and Cons for Married Couples

There are many reasons why entrepreneurial couples should consider investing in real estate. Historically, well-planned real estate ventures have proven to be some of the most profitable investments. Of course, most people are aware of real estate's tendency to increase in value over time. This increase, in addition to reliable and oftentimes generous rental proceeds, has earned leased luxury homes and condos a solid place in a balanced investment portfolio.

The flourishing real estate opportunities in Glendale, CA, are sure to impress couples looking to add high-end residential real estate to their holdings. Nestled in the foothills of the Verdugo Mountains in the sunny San Fernando Valley, Glendale offers some of the most sought-after real estate in the country.

From the natural beauty surrounding Glendale to the city's inner core, with its energetic business scene and an array of metropolitan amenities, Glendale is an ideal location for those who want to live, work, and relax in one of California's most beautiful regions.

For investors, these high-end features have the potential to translate into lucrative investments that are likely to produce a substantial rate of return. As interested joint property investors consider the pros and cons associated with investing in real estate, it's good to know that our highly qualified Glendale real estate agents can also act as supportive guides throughout the entire process. Read on!

The Pros of Joint Property Investments

Why do strategic real estate investments tend to become winning financial investments over time? Analyzing these types of investments reveals several key reasons, as follows:

A high potential for return on investment

High-end real estate tends to appreciate significantly over time, and a historical review of the luxury properties for sale in Glendale, CA, confirms this. By taking advantage of the stunning views, the prime real estate opportunities in the area have consistently increased in value over time. The area's prestigious location, coupled with its beautifully appointed homes and condos, proves to be a winning combination time after time.

Tax incentives

Like the home you own with your partner, owning a Glendale luxury home or condo comes with tax advantages. Certain expenses associated with rental real estate properties are considered deductible and can lower a couple's taxable income. In addition, the rental income a couple receives is not subject to self-employment tax. Lastly, any long-term profits investors eventually receive are taxed at lower rates.

Flow of income

Top-notch real estate investments provide couples with a relatively reliable stream of cash. They can use the income they receive to pay the mortgage and other expenses associated with owning the investment property. This essentially allows investors to own a lucrative property that pays for itself. In some cases, the rental income received is more than the expenses associated with ownership, so investors can enjoy immediate passive cash flow. If a couple decides to divest themselves of the investment, they'll enjoy an additional financial gain that invariably occurs with the sale of a well-maintained property in an exclusive area.

Making improvements to improve the rental appeal

Unlike corporate stock investments, which are controlled by decisions made by board members and other parties, property investors have direct control over their assets. Savvy property investors will know when and how to make strategic improvements to their investment property. In turn, the right improvements can justify a higher rental price. Property owners can also formulate strategies to attract the best tenants who are willing to pay a higher rent in exchange for a premium living experience.

A jumpstart on retirement savings

Investing in a second home may help a couple get an early start on purchasing their retirement home. Due to career or family demands, a couple may not be ready to live in the forever home they discovered in the Glendale area. However, some couples know that they want to make living in Glendale a key part of their retirement plan. Purchasing a home in the area now will save them a substantial amount in the long run. 

The Cons of Joint Property Investments

In general, long-term real estate investments offer little in the way of disadvantages. Even so, something unexpected may happen, and a couple may find themselves needing to dip into their investment portfolio.  While stocks can be sold without delay, it's not possible to liquidate even a profitable real estate investment immediately. In addition, there are higher costs associated with real estate transactions than other transaction types, which can erode any expected gains.

The need to do research and consult a tax professional

For couples in high-income brackets, certain tax benefits may no longer apply. Before making a real estate purchase, it's a good idea to consult with a tax professional who specializes in real estate to ensure that you can take advantage of all the tax incentives associated with owning a property.

Unforeseen costs

Even a well-maintained luxury property can incur unexpected expenses, perhaps due to a natural disaster or, in some cases, problematic tenants. It can be challenging to oversee the property management company put in place to ensure your investment is adequately restored and manage unexpected costs, especially if a couple has significant career and family demands.

Regulations and staying focused on your goals

It's almost impossible to predict changes that may occur in the future. State or local landlord-tenant rules and regulations may be modified over time, perhaps making the area less attractive to tenants. Local building codes may change, making it more challenging for property owners to execute the goals they originally envisioned for their investment property.

New investors may be prone to allowing emotion and sentiment to cloud their goals for their investment portfolio, especially if they fall in love with a particularly beautiful property. It may be challenging to remain objective, leading them to underestimate the time and energy required to maintain the status of their investment. If the rental property begins to drain rather than add to their portfolio, it may also prove difficult to extricate themselves from ownership of the property.

Start the Investment Process Today

If you’re ready to move forward and invest in Glendale real estate, The McGlashan Group is ready to help you achieve your goal of developing a well-rounded investment portfolio through the addition of financially rewarding real estate.

Whether you're ready to make your first investment in a home or condo or you're an experienced investor looking for properties to add to your current real estate holdings, this exceptional team can assist you in achieving your objective. Each member of The McGlashan Group can provide the guidance and expertise necessary for you to marry your vision of the perfect real estate property with an investment opportunity that not only meets but exceeds your expectations. Reach out today.

*Header photo courtesy of The McGlashan Group

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