Buying

8 Tips for Buying Investment Property

Published

4 years ago

September 7, 2020

Annika

Investment can be very rewarding. The idea of shelling out cash for something that would eventually garner in double the price you bought it for in the future is nothing short of exciting. For this reason, many individuals have started learning about the trends of stocks and may have even tried their hand at investing. After all, there comes a point in your life wherein you are financially secure enough to desire some pecuniary fortification and investing your hard earned cash is one way to do this. However, as it is, not all kinds of properties would appreciate in value.

Some properties depreciate over time and would constrain you to compromise your desired fetching price for you to make a sale. One example of this is cars as not necessarily all of them would increase in value over the years. Another thing that devalues would be gadgets as they tend to be rendered obsolete over time. But if there is one type of investment property whose value is guaranteed to be on the incline, it is real estate.

Buying Investment Property

If one is aware of the logistics in investing in real estate, it can be a real gold mine as the advantages of doing so are quite substantial. In fact, ownership of real estate is considered a tangible asset whose value is buttressed solely by the fact that land is a commodity people cannot make more of.

However, property investment is not a skill that one can learn overnight, and some may even get overwhelmed by the lengthy logistics and processes and quit before even beginning. It does not have to be confounding, however, if one has an awareness of the basic precepts. Here are some helpful tips that would aid you in the process so that regardless of whether you are planning to invest in a house and lot in Laguna or elsewhere, you have a rough idea of what you should do.

Check your finances

There is no question that your financial state is of paramount importance when you are considering property investment as this will give you an approximate of how much cash you have available to invest. This can simply be done by listing all of your assets which should include all the sources of income and work out your expenses. Having an awareness of the state of your finances would also give you an idea if you would need to get a loan or not.

Get a pre-approval

Suppose your income and available funds would not suffice for a property investment, you can always get a loan. Get your pre-approval directly through your lender or a trusted mortgage broker. If you are unsure if you are ready to invest, going through a broker before applying for a pre-approval can be beneficial.

Set your goals

You need to have an idea of what you are looking to achieve and what success would look like to you. Most property investors go into investing to grow their money, fortify their sources of income or secure their financial future. Similarly, you need to have goals of your own and for you to achieve them; you must articulate what they are on paper for better retention. Additionally, set a deadline as to when you want to achieve these and work backward from there.

Understand what type of attitude you have towards risk

The kind of risk you want to take determines the kind of strategy you should engender. It also helps you have an awareness of what sort of risk. Getting into property investment involves some risks and knowing your attitude towards it will enable you to develop a strategy that reflects it.

Start budgeting

In essence, budgeting goes against every grain of a carte blanche investment, but it is necessary. It may not seem like a very feasible idea to some and is not the least bit interesting, but it is necessary. It ensures that you can balance your income and expenses and allows you to observe where your money is going. This will help you plan for bigger expenses in the future.

Create a purchase plan

Your purchase plan should facilitate your goals. It ideally serves as the framework of reaching the kind of income or financial growth you are aiming for, and it helps you have an idea of what to do next. Think of your purchase plan as a road map and your investment process an unchartered path which you have to navigate with the aid of your purchase plan. It serves as a structure to keep you focused on your goals. A purchase plan should be well researched, should define a strategy, have criteria. From this, you can cull the list, get an appraisal, make offers and negotiate.

Be informed

There are a lot of tools at your disposal, use them to make an informed decision. One crucial thing to making the right investment choice is to know the market. Explore some forums online for insights. Being well-informed means adequately arming yourself against property peddlers and get rich quick schemes. Remember, there are no property psychics, and there are no real guarantees.

Stay focused

Staying focused is imperative as investing in property is not an emotional reaction but a business decision. Have a clear idea of what you want to achieve, when you want to achieve it and identify the potential obstacles you may encounter before reaching your goals. Getting overwhelmed may occur especially if you are undertaking something as colossal as property investment, but this is no reason to give up. Take it one step at a time and learn the basics, know what kind of risk you want to get into and you would eventually get the hang of it.