Property investment has long been popular with those who are looking for a second stream of income. While you will not become a millionaire overnight, investing in property can certainly yield some great returns. To ensure this is the case, read on to discover some of the important things you need to know.
- You need to take a long-term view – As mentioned in the introduction, property investment is not a get rich quick scheme. You need to take a long-term view. Don’t rely on property prices rising instantly, as it is going to take time. The longer you can commit to a property, the better. This means you can build up equity, which will then enable you to purchase another investment property. Take your time and don’t rush into things.
- There is plenty of help available – There is plenty of assistance on hand, and you should make the most of it. Why not join one of the real estate investment groups and clubs that are available? You will gain access to some really useful information, and you may also get invites to property events, as well as access to exclusive opportunities. You can also find plenty of blogs and forums online, which can be very helpful.
- Check the condition and age of the property and the facilities – If you don’t do this, your property investment journey could get off to a very, very bad start. Replacing the hot water system or the roof within the first few months could really damage your cash flow and hurt your profits. This is why it is of paramount importance to get a professional building inspector in there before you commit to a purchase.
- Be cautious with mortgage selection – There are many different types of mortgages available today, enabling you to finance your investment property in a manner that suits you. This is the important part – make sure your mortgage actually does suit you. There is no right or wrong choice between a variable rate loan and a fixed rate loan, but you need to understand the differences and what these differences mean to you.
- Understanding the market is vital – It is important to take the time to assess the other properties in the immediate area. You should also speak to as many real estate agents and locals as you can, as they will be able to give you an accurate feel for what the area is like. Make sure you get information on demographics, property values, and average rents from independent sources.
- Cash flow is king – Last but not least, it is important to recognize that cash flow is always king. If you don’t manage cash flow effectively, you could find yourself in an unwanted position. Remember, servicing and owning a property is not cheap business, so it is vital to make sure you have enough money available.
As you can see, there is a lot that needs to be considered when it comes to property investment. Follow the six tips mentioned above to help you get started.
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