Every people in the world want to build a retirement nest egg while they are young, and wish to worry nothing after retirement. Well, property investment is one of the good place and safest-long term investments where can letting people to build their wealth for future use.
Although investing in property can be an excellent way to build wealth, but there are some rules that every new property investors have to consider before stepping your foot into property investment. Here are the top 10 tips for getting started in property investment, and make sure you’re following these tips forever.
Tips #1: Identify your budget
This is extremely important to have a thorough understanding of your cash flow before getting started in property investment. Besides, before hunting for a property, request your bank for a pre-approval of your bank loan, so you’ll get to know how much you’re able to borrow. And you also have to consider the unforeseen costs.
Tips #2: Find out your investment strategy
What you’re going to do on your first investment property? Rent it out? Make a property flip a flop? Investing in residential property or commercial property? and so on. You’ll have to get the answer of every each questions. To lead yourself to the successful path, you’ve got to have a good plan on your hand. (Click here to read: 7 Steps To Designing A Best Investment Strategy)
Tips #3: Don’t underestimate the costs
Make sure your budget is enough for the costs of insurance and general repairs. After you have purchased the ideal investment property, you should do all the necessary repair and replace to avoid the costly maintenance issues arising.
Tips #4: Buy in a high demand area
Make sure you’re buying the investment property is located in high demand area, such as strong demand for rental accommodation. Buying a property close to public transport, schools and universities will make it more attractive to renters.
Tips #5: Build equity
Paying other people to renovate your investment property is costly. If you have free time and know some DIY (if you don’t, you can learn from Youtube), you can help yourself to save money and increase your profit margin by doing the renovation work on your own. Except the work that requires professionals, such as electricity and plumbing system.
Tips #6: Hide your emotions when buying
When house hunting and negotiating, its very easy to get caught up in emotions. Although a home that have a stunning view, but it’ renovation costs can be a nightmare for you. Be sure you have list out all the pros and cons of that property before making the deal.
Tips #6: Buy liveable not luxury
When house hunting, keep in mind that a rental property only has to be clean and functional. Don’t buy a property simply because it has a stylish interior.
Tips #7: Start with small first
For newbie property investors, it is advisable to invest in small property at first. Start with small property and then as you generate profits, putting those profits into the next property. Experience is vital, the more experience you gained, the better profit you can earn. You may also consider starting with rental properties or the property at below its market value before moving onto higher priced properties.
Tips #8: Do your due diligence
In order to make real profits from property investment, you’ve got to study and understand the market movement and look for the opportunities from it. Before decide to buying that investment property, make sure you have do your due diligence on that property and its area. For example, income level of the neighborhoods, upcoming or future development in the area, crime rates, natural disaster and so on. These are not the only signs of opportunities for profits in real estate, they are also a good place for getting started.
Tips #9: Stick to your budget
This is very important, once you have come out a budget and plan, make sure you’re stick to it. For example, if you need to remodel/ renovate a kitchen in order to rent/ sell high, you will need to accurately assess the total costs by pricing out each item that will be replaced or refurbished and make sure its in your budget. Once you start a project, you will also need to monitor the budget so that you can make adjustments accordingly if you’re close to exceed your budget.
Tips #10: Consider auctions/ foreclosures property
In order to buy the property at below its market value, you may consider to look for auctions or foreclosure market. There are many homeowners lose their properties due to defaulted on home loan, and hence it create opportunities for those interested in property investment. Opportunities are just out there, and waiting for you to discover it.
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