What are Income Properties?

Investing into real estate properties can become a lucrative source of income for multiple reasons. First, investing into real estate is a safe alternative to other investment sectors such as traditional saving and investment bonds or the stock market due to the higher returns and lower volatility of stocks. This is especially true in Egypt, where the real estate market is thriving therefore guarantees a stable high return on investment- while traditional saving bonds and the stock market have much lower and less stable returns, among the highest return on investment are income properties.  
Income properties are investment properties that can generate income for their investors. They can be retail, offices, hospitality, or other types of commercial properties. However, the Egyptian market does not currently have the investment environment necessary for residential income properties yet, therefore income properties in Egypt are only available through the commercial sector.  
Second, investing into income properties can become a long-term income source through specifically targeting income property investments, which can be done through multiple ways. The most feasible way is buying an already rented property and collecting rents, which can be rather lucrative especially for prime location commercial properties that can be guaranteed high demand and an increasing rent value. The most common tenants are usually either from the banking sector, telecommunications corporations, or the multinational F&B sector.  Income properties can also provide a source of income through net profits of business operations as well as through sale after the property value increases over time.  
 
What are the types of Income Properties?
 
1. Retail Income Properties are the primary choice for investors due to their high rental appreciation, constantly increasing market value, and high return on investment.  2. Office Income Properties are the second-best choice for investors especially for properties where rents are based and paid in foreign currency, therefore benefiting the investor through high currency volatility.  3. Hospitality Income Properties are also highly rewarding depending on their location and targeted market, but also benefit from high currency volatility due to their rents being based and paid in foreign currencies.  4. Medical Income Properties are the latest to appear in the Egyptian market after the development of high-end Medical complexes, they are highly demanded and can generate high incomes based on their location and size.  
 
 
How to Structure your Investment as an Income Property?

Income properties must be structured appropriately to effectively generate income, they must:  
• Have long term lease contracts • Target standard A or B Tenants • Have properly structured annual rental increases • Include calculated high yield or return • Be in long-term prime locations to benefit from the maximum appreciation rates • If located within a mixed-use property, then ensure the property has a prime tenant mix • Bought at fair market price  
 
How do Funds and Investors Evaluate Income Properties?

• Ensure the property has all the above structure characteristics. • Ensure the property can guarantee the highest Return on Investment (ROI)  • Ensure the property can guarantee the highest Internal Rate of Return (IRR)  
 
How to Find and Invest into an Income Property?

As shown, choosing to invest into an income property can be highly rewarding but does require an understanding of the market and a specialized real estate consultancy to pick the right property for the type of income an investor is interested in. Seeking out a real estate consultancy firm with a reputable investment background and portfolio is necessary. So, if you’re interested to understand more about the real estate investment market mechanisms, get the available options within your investment budget bracket and have expert assistance, don’t hesitate to contact our market experts at B2B where the Investment and Research and development departments are equipped to identify, evaluate, and present the best income properties at the best prices.