Property investment is a way to generate income by purchasing and renting out residential or commercial real estate. Investment properties can be single-family homes, duplexes or apartment buildings. Real estate investors seek a high return on their investment by charging rent to tenants while also benefiting from the property’s capital appreciation over time.

Many people choose to invest in property because it provides a more stable source of income than stocks, which can fluctuate over time. Buying property also allows you to diversify your investments, which can mitigate risk and reduce the chance of large losses in one particular area of the market.

There are several factors to consider when looking for property to invest in, including the type of property and its location. While you may have a general idea of what kind of home or business you want to buy, it’s important to do your research before investing in property. This can include analyzing the local housing market and talking to other property owners. You can find plenty of information on the internet, but you should also visit the local real estate offices to get a feel for the market.

Another thing to consider is the amount of time you can devote to managing an investment property. This can be a lot more work than simply buying a home for personal use, as you will have to advertise the space, screen potential tenants and take care of any maintenance issues. Depending on the kind of property you choose, you may also have to worry about vacancy rates and whether your tenants are paying their rent on time.

The best way to increase your chances of success with investment property is to purchase a house or apartment that can be easily rented out. Duplexes and multifamily units are a popular choice because they allow the owner to live in one unit while renting out the other. Accessory dwelling units, or ADUs, are another great option for property investment because they can be built in a garage, converted shed or attached to a main house as an in-law suite or apartment.

You should also try to purchase property that will appreciate in value over time, which you can monitor with the help of a tool like Rocket Money. Investing in rental properties also offers some tax benefits, such as the ability to deduct the interest on your mortgage and any expenses associated with the property, such as repairs or advertising.

Finally, make sure you have a fully funded emergency fund before investing in property. Even the most well-maintained rental can have unexpected costs, such as a leaky roof or an unruly tenant, and it’s better to be prepared than not.