So you’ve decided to get an investment property. You’ve heard from a lot of people that it’s a good business. Should you immediately jump onto the bandwagon and buy one?
Well here’s some good Property Investment Advice:
Every good businessman knows that only with the right information can you succeed in any business endeavour. You need to equip yourself with all the necessary information to successfully carry through with an investment.
As with investment properties you also need to have sufficient information in order to make a wise business decision. Here are the 5 essential things you need to know before you make a property investment:
1. Know the basics
If you’re not well-versed about investment property then this would be a good time to learn all about it. Learn at least the basics. Here are some few pointers to get you started:
- The different types of properties – There are various types of properties you can invest in: residential, commercial, and industrial. You’ll need to decide which one of these you’ll want to invest in.
- The different types of investment – You can be directly or indirectly involved in an investment property. When investors talk about property investment though, they usually mean the direct type of investment. This means you will become the property owner and you’ll have complete control over the property. Indirect investment means investing in a product or service that is affected by a property’s performance.
- Landlord insurance – This is an insurance to protect landlords from financial losses due to property damage, theft or rental payment default.
2. Determine the numbers
- Cost and expenses – Before purchasing an investment property, know first what probable costs and expenses come with it. Aside from the actual upfront cost of the property, also determine any repairs you would need to do in order for it to fully function. Also consider the insurance and property management fees you will need to shoulder when in operation.
- Return of investment – Probably the most important number you will need to check before investing is the ROI. Although nobody can really give you an assured and definite ROI, it’s good to know the possible numbers. Can you profit from this investment or will it be a sure loss? You have to know this before buying an investment property.
3. Be familiar with the advantages and disadvantages
As with any big investments or decisions you must do, you must first learn about the pros and cons. It will help you make better decisions if your decision is an informed one. Find out the advantages and disadvantages of property investing before making a purchase. Know the advantages to weigh if the investment is worth taking up and learn about the disadvantages to prepare for the possible negative outcome of investing.
4. Know what to buy and where to buy
Based on your knowledge about investment in property, determine what property you want to buy. Aside from the type of property you want to invest in, also determine what features you want the property to have. You can base this on the market you want to attract. For example, for a residential investment property you may want to include a second bathroom for families or you may want to pick a property close to shops and cafes for singles and couples.
Also know where to buy the best properties. A key in doing this is to regularly check your local dailies. You’ll need to know where the hot markets are to be up to date with the property trend. You can also check online for bustling neighbourhoods that are good to invest in.
5. Know where to find an investment property adviser
For you to make better financial and investment decisions you’ll need help from the experts. An adviser or consultant will help you make the right investment property purchase and can also help you build your property portfolio.
Here at Investment Property we have consultants who are experts in residential and commercial property investments. Our team can help you with any of your investment property needs.
Knowing these 5 factors will help you in your investment property endeavour. Equip yourself with the right information to pave your way to successful property investment.