When you start looking at different investment opportunities, real estate may stand out more than other options. It’s a tangible asset that experiences steady growth, and it can provide a stable return for many years.
However, given how many hundreds of thousands of dollars an investment property can cost, it’s not a decision to make lightly. Consider researching the following things before you sign on the dotted line.
Experts to Help
Long before you even start visiting open homes, begin researching the experts you will need to align yourself with to guide you through the property purchasing process. This may include the best property investment consultant, accountant, and builder in your area.
Property investment consultants can assist with property investment strategy, finding suitable properties, negotiating competitive deals, overseeing property transactions, and more. You may also need an accountant to manage your finances and a builder to ensure properties you consider are sound.
Market Trends and Property Data
The more you understand the property market you’re buying in, the easier you may find it to make decisions based on that information. For example, paying close attention to how long properties sit on the market in specific suburbs can be crucial if you plan to buy, renovate, and sell a house.
If you are purchasing properties to rent out, researching vacancy rates and rental yields can help you understand whether some locations are more desirable for rental properties than others. Viewing recent and past property sales and even auction clearance rates may also help you make informed decisions that benefit your bottom line.
Your Financial Situation
If you don’t know where you stand financially, you may not be able to start property hunting in earnest. Learn your financial situation to understand what you can realistically afford in the housing market and how long it will take for an investment property to start earning money.
Fortunately, there are experts to assist with this process. For example, property investment consultants can look at your goals to help you establish a budget and find properties that fit within it.
It’s improbable that the average person will be able to purchase their first investment property outright, especially as a higher down payment can often be required for a second home.
Look at your funding options so that you have a foundation from which to work. You can then learn about your down payment requirements, interest rates, and any pitfalls such as high mortgage application fees and strict lending criteria. The more information you gather, the easier you will find it to narrow down your purchasing options.
Once you know what you can afford and the areas in which you’d consider purchasing your new property, you can start researching information about specific properties. Find out their build histories, the permits in place, and any potential problems you might face if you were to make alterations or renovate.
It’s also in your best interests to hire a building inspector or builder who can point out potential problems liketermite damage and other significant concerns. The more due diligence you do, the more confidence you can have to invest several hundred thousand dollars into real estate.
Purchasing an investment property is not a decision to make lightly. While it’s one of the soundest investment options available, it does require planning and expert help. By researching a property, your funding options, and even market trends, you may be able to purchase one or more properties with far more confidence than you thought possible. Consider these helpful tips above when the time comes to start your investment journey.