Investments have become quite popular in recent years, whether it be in shares or property. However, investing also comes with an element of risk, so you really do need to do all your research before jumping right in. There are many ways you can make your foray into property investment. You can choose an existing property, or buy a piece of land and build on it – if you are considering anything similar to the second option, you may also need to consult home building specialists like Coral Homes . If you’re just starting out, or even in the middle of your investment process, here are five things you should take into account.
The neighbourhood that you select is really quite important – just as if it would be if you were buying a house for yourself. Think about the kinds of people who would want to live in that area – that will help determine whether it is a viable choice as an investment property. Additionally, you might also want to drive around the property at different times of the day, just to get a feel for its surroundings.
Being in charge of an investment property also means being in charge of fixing any issues with it if they arise. If you’re a self-professed and confident handyman, this should be no problem for you. If you’re not so sure about your skills, calling in professionals to repair broken pieces of equipment can get expensive very quickly – and keep in mind that everything from air conditioning to appliances and doors can break at any time.
Expenses can be fixed and variable, and you will have to account for both of these if you commit to investing in a property. Fixed expenses can include insurance and taxes, and variable expenses will mostly consist of the aforementioned maintenance costs. Once you find a property you like, estimate how much money you will need to spend on these expenses, and if you will be able to recoup these through rent.
This ties in with the neighbourhood in which you are purchasing your investment property. Your target demographic in that particular area could be anyone from university students to families, so the rent you are able to charge usually reflects this. Properties in the inner city suburbs, around universities and areas with high amounts of traffic can bring in more rent, but those in the outer suburbs may not be able to attract the same amount of money.
Have a Plan
It is always important to have a plan before you start such a large undertaking. This plan might change during the process of finding a property, but this is to be expected. Don’t budge on the important things, like how much you’re willing to spend, but always have an exit strategy, just in case things don’t turn out the way you anticipate.
These are just five things you should remember when and before you decide to invest in property. It is a very volatile and cutthroat market out there, so do be careful and do all the proper research!
Have you or are you investing in property? What tips would you give to others that are just starting out? Is there anything you would do differently? Leave your advice and thoughts down below.