Investing in property certainly isn’t a get rich quick scheme. In fact, it takes a lot of hard work and determination to make money out of it.
There are many advantages to working in real estate and after time and effort, it can bring in a significant amount of financial return. But, there are often many downsides to investing in property.
So, before you dive right in the deep end, it’s important to do your research first. Before you get started, ask yourself these questions to ensure property investment is the right move for you.
Have I Got the Money?
You’ve heard the saying before – it takes money to make money. This is never truer than when it comes to property investment. Gone are the days when a loan company will lend you money based on your goals alone.
You need to have a significant amount of money to use as a deposit if you want lenders to take a chance on you. It also helps if you can demonstrate your skills in property development and management and a financial plan for the next few years.
What Kind of Property is Right for Me?
Real estate is a large investment so there isn’t much room for error. What do you see yourself doing? Perhaps purchasing a property you can sell on for a profit after some simple upgrades? Or maybe you plan on becoming a landlord.
Maybe your plan is to invest in overseas property and sell holiday homes. Whatever your goal is, you need to make sure you have as much information about it as possible. Don’t attempt to purchase high-end property as your first investment because several lower costs homes will make you more money.
Is the Neighbourhood Right?
You can’t invest in a property without knowing everything about it first. Just liking the look of a house isn’t enough to get you the return on investment you’re looking for.
You need to consider whether the neighbourhood is safe, if it’s near schools and hospitals, what other benefits it has for your potential buyers.
Don’t just take your realtors word for it. Take a drive around potential neighbourhoods yourself and see what your buyers will be living with, with your own eyes.
Have I Factored in Expenses?
Purchasing a property isn’t the only expense you’ll need to consider when it comes to property investment. No matter what you plan to do with the property, it will be your responsibility to get it up to scratch.
Many first-time investors make the mistake of assuming that the expenses will be low-cost jobs, like replacing a shower head or tidying the back yard. In reality, many properties have a long list of expensive jobs, like rewiring electrics or installing a new roof.
How Can I Pull Out?
If this venture doesn’t work out for you, you’ll need to cut your losses quickly. So, what will be your plan B? It’s always wise to expect the best, but plan for the worst.
Talk to someone who has been there and done it before to get a wealth of knowledge before you get started.
