Do you want to start investing in property? Property investment can be very rewarding if done right.
After all, many of the world’s wealthiest people started their portfolio with real estate investment, so there are plenty of reasons to consider property as a sound investment.
Property investment can be more safe than stock market for example; as you usually do not lose your capital.
Here are some essential tips that may help you in property investment.
Decide if you want to rent or flip the property
It is always better to have clear goals from the beginning, knowing your goal helps you start on the right foot.
Renting and flipping investment properties are different, and they require different strategies, so it is important to know which one you intend to pursue from the beginning.
Flipping a property basically means that you buy a property with the intention of reselling, as fast as possible.
It requires more than cash, you should be ready to buy, fix, and sell the home. If you are able to sell quickly, however, it also offers a faster profit.
Renting requires fewer repairs, but it will probably take longer to make your initial investment back.
Rental properties require long-term commitments for maintenance, but they also offer long-term income.
Research the market
Research goes a long way, but it is not like being a local.
Learning the ropes of renting or flipping a property while also learning about a new place can be overwhelming.
That is why It is often easier to start out by investing in a property near where you already live.
Of course you still need to do a lot of research, but knowing the area means you do not have to start from scratch.
Research thoroughly though, check market price, check what places may suit your target market and check to see if it is easier to sell or rent in the area.
If you have got your eye on a property, check out similar properties in the area. Approach this task as if you were a buyer or potential renter.
Add the cost of fix and repair
Deciding to consider properties that need a lot of repair depends on whether you intend to flip or rent the property.
If you plan to flip the property , you will want to find the value of the renovated property after the required work.
For example, if you know that you can sell a fixer upper for a good price, something that would cover all your expanses with a decent profit margin, you may want to consider it.
On the other hand, if you plan to rent, try to avoid major work and expensive repairs.
Because renting is a long-term investment plan, you want to minimize your starting cost. It may be a while before you start making profit.
Choose your location wisely
When considering an investment property location is important on so many levels.
First of all, you should choose a location near your primary residence because You will be traveling to the investment property much more than you think.
Moreover, you need to look for a location that caters to tenants’ needs so you can easily find the right tenants.
For example, a family neighborhood with plenty of amenities like parks and malls, or an area with a growing job market.
Are you ready for property investment?
A lot of people think of buying a property to rent out as a passive investment. It definitely is not.
Landlords need to attend to building maintenance and address issues tenants may have that cannot be put off. They also need to invest a lot of time and effort to find the right tenants.
Additionally, your first property investment will take a lot of your time as you learn the ropes of being a landlord.
Think of it as a part-time job. Do you have the time?
You should also be ready to spend some money before you start actually making money, hence the term investment.
And this may cost more than you even think, factor surprising and unplanned costs and repairs in your budget.
Consider all that and then decide if you are ready to start investing in property.