From initial researching to finanlising the purchase, there are plenty of steps and a lot of planning involved when you purchase the first property as an investor. You should start hunting for the best investment property options with an unbiased approach. I understand the problems faced by the new real estate investors and hence would like to share the do’s and don’ts of real estate investment.
1.) The Research
DO: A lot of market research thoroughly and leave as little as possible to chance. Identify the location where you are planning to buy an investment property and then know about the price trends and the demand for properties in the area in the future. Identifying the upcoming future projects in nearby locations can help make the better choice. Check for what sort of money you would need to invest to get a decent return.
If buying a rental property, know what will be required for you as a landlord. There are certain services that must be provided to the tenants. Also, you need to pay taxes on your income you generate through the property. And of course, the running costs are must consider – cleaning, decoration, repairs, refurbishment fees, etc.
DON’T: Assume it will be easy money.
2.) Choosing the property
DO: When buying in your own local area, buy an investment property can be an easy task as you already know the location and the property price trends very well. You can get to the property easily in a pinch. But, what if you are planning to invest in real estate property in a location that is not known to you? There are various considerations that must be undertaken before finalizing the deal. Consider exactly what you want to achieve from your investment property and your strategies to achieve desired goals.
Remember that real estate investment properties bring great returns, but it needs time. No one gets multiplied the amount of the property just within a year of investment. It is entirely your decision whether you want to treat your property as an income source or simply as a low-yield nest-egg. If you’re not sure about the level of risk you are going to take by investing in an investment property, make sure you buy in the group. Of course, this reduces the benefits but the losses are also divided among the investors.
DON’T: Wing it!
3.) Choosing the Financing Options
DO: Shop around for the best deal. This is the best bet anyone can make when considering to buy an investment property.
There are literally hundreds of companies offering loans for property purchase. Considering that your mortgage interest will be your biggest outgoing each month, make smart decisions and select the best financing opportunity. However, also remember that cheapest is not always the best. Some mortgage companies have plans that come with special features, such as allowing you to switch at any point without incurring exit fees, etc. Some are specific types of purchase as well.
So before you reach your final decision, make sure to get quotes from different loan providers to find an appropriate lender.
DON’T: Opt for the first mortgage you come across.
4.) Expert Advice
DO: As an expert for best options and steps to reap maximum returns. No matter how experienced you are in buying the real estate property, it is always preferred to ask an expert before you reach final your decisions. Hire real estate agents to have a look at the best property options available in your target location. These professionals know everything about the market like upcoming projects in the area, future of the real estate in the particular location.
Asking help when planning to sell the property also makes it a smart choice as they can tell how and when will be the best way to get maximum benefits for your investment.
DON’T: Assume you can do it all alone.
Until you are not buying an investment property, consider staying informed about the latest market trends and wait for the right time to hit the bull’s eye.