Property investment: it’s the domain of property tycoons and multi-millionaires, isn’t it? Not necessarily my friend – with a bit of capital, some know-how, and lots of research, even you can start your own little property empire. Whether you’re aiming high and dreaming of becoming a big property player, or you just want multiple passive streams of rental income to give you a comfortable life, property investment isn’t as scary as it seems if you are willing to learn. Here are the top 4 tips for property investment to help you get started!
1. Location Matters
It goes without saying that a piece of real estate is stationary. The property you want to buy isn’t gonna just stand up and move to a better area overnight. Hence the location of your property makes a huge impact on its price and potential growth. ‘Location, location, location,’ as the saying goes.
So what are the things that make a good location? Well, to put it simply: is it a good place to live or work at? Think about convenience. Is your property within easy reach of amenities and public transport? Is there a train station nearby? Are there any universities or office areas nearby? All these things have a big hand in determining the price of your house as well as how much you can charge for rent.
If you are planning to rent it out, you should definitely take the distance between your own home and the property into consideration. Staying near to your rental property gives you the advantage of being able to handle maintenance and address tenant complaints more easily. If you want to take a less hands-on approach, however, or if the properties you plan to purchase are far away, you can consider hiring a property manager to help you manage your portfolio for you.
2. Find A Good Real Estate Agent
Never underestimate the power of a good real estate agent. The right agent can work wonders for you and take a lot of the stress off your shoulders. What property agents offer is the professional expertise and contacts that you may not have. They make your work much easier and can also potentially sell/rent out your property quicker much quicker than you can.
If you’re house hunting a good agent can help you find ideal properties based on your stated needs and they’ll also help with the negotiation process so you can get a favorable price. As for renting out your property, they can help you with the searching and screening process for potential tenants. It’s always good to have a healthy relationship with your agent in order to ensure that the both of you can benefit from each others’ patronage.
3. Research And Compare For The Best Loan
Properties are illiquid assets, as such it may not be a good idea to tie up all your money in them. The process of selling a piece of property can take anywhere from six months to a year or more, and even then you may not be able to get a good price for it. So financing your investment by taking out a mortgage loan is usually a given. However, it is important to educate yourself about the various loans available to you on the market so that you can find the one that suits you the best. Learn about the different interest rates, settlement cost and prepayment penalties that different banks offer.
Also if you decide to finance your property purchase with a loan, you can use the money you earn from rental income to cover your monthly installments. Find out how much rental income you can expect to get and compare it with the amount you have to pay every month. It’s ideal for your installments to be around 60% of your rental income so you can still make a profit and also cover the cost of maintaining the property.
4. Different Types Of Property For Different Needs
Landed properties are more expensive than apartment units. However by the same token, they also appreciate in value much more than apartments too. If you can, try to buy a landed property, even if it’s just a single-storey house. It will benefit you more in the long run.
Of course, this is not to say that apartments are worthless as an investment. Apartments are popular for renting out, and their cheaper prices also can be attractive to first time property buyers. Always buy within your means and don’t overstretch your budget.
Also remember to take into consideration the freehold or leasehold nature of your property. Freehold property has no maximum leasing period which means you can own it forever. Leasehold property have a finite leasing period (usually 99 years) is renewable. These can affect the price of your property. A freehold property is more valuable than a leasehold especially when there aren’t many years left on the lease.
This article was edited by the editorial team of advbombmedia.com. To contact them about this or other stories email firstname.lastname@example.org