Investing in real estate has led many people to fortune over the years, but you need to make sure it is something that is right for you. Buying property will cost you in the region of six figures, to begin with, and you will want to recoup that cost back before you can even begin to think about any possibilities of wealth down the line.
You need to plan carefully before splashing out an enormous amount of cash on something that may end up being a catastrophic nightmare.
Consider the following before you take the plunge into real estate.
Speak to the right people
Seek any advice you can before investing in a property. For example, architects are the right people to talk to when considering a particular property, giving you advice on planning permission and any potential problems you may face with the house you have in mind. You should also speak to the local estate agents who will advise you on the rental market for the location you are choosing.
Getting your hands dirty
Not only are you investing in property, but you may need to renovate anything you buy. If you don’t have the DIY skills you will need to hire construction professionals such as builders, plumbers, electricians, etc.
When your property is ready to rent to prospective tenants, you will probably need to meet potential applicants unless you are going through an estate agent. A good landlord keeps on top of repairs, such as unclogging toilets and repairing any damages, so unless you can afford to keep calling out professional help, you will get your hands dirty.
The right location
Finding the right location for your property is imperative. You don’t want to invest property in an area that is likely to be at risk of environmental damage, such as flood risks. There are other things to consider within the location, including crime rates, the job market, amenities such as shopping centers and parks. A company such as http://www.promap.co.uk/ will be able to help in this regard with advanced mapping solutions to help you make educated choices.
Have money sense
If you are already in debt or have ongoing expenses such as medical bills, you need to prioritize your finances. Purchasing a property is a constant expense, and you are not guaranteed to make any money from it, particularly in the short term. You will need to make a large down payment, to begin with, so you need to think carefully whether you are in the right financial position. There may be other areas of your life, such as family or health, that need to come first.
Banks are often very willing to give people money, provided they pay it back, with high interest. The interest rate on buying an investment property is going to be high, so you need to consider your mortgage payments. Other strains on your finances include maintenance costs, property taxes, building insurance and possibly homeowner association fees.
The bottom line, budget carefully now and reap the rewards in the future.