If you are planning to buy your first investment property, you might want to know some factors first for you to make the right and best choice.
Keep these following tips in mind when purchasing your first investment property.
- Get All Your Finances in Order
As the starting point, you should take a look at your debts and pay off as much of this as you could before you begin investing. Settle outstanding student loans, clothing accounts, and so on. After that, reevaluate your position in terms of your finances. Property is not a short term commitment and therefore, it’s advisable to look at short term future debts that would be popping up the next year. For example, it might be wise to delay buying if you’re planning to send your kid to university.
- Research Market
As with some things, investors have to be educated thoroughly about the relative market before they start investing. Take note that just because the property markets are doing good in some places, it does not mean it’s a given that this applies everything in the country. Remember that unlike investing in stock market that might only set you back some rands per share, investing in real estate will always involve serious capital.
- Know the Interest Rates
The interest rates remain fairly low. But, it should be remembered that the banks decide how much the interests they’re charging.
- Be Cautious of Fixer-Upper
Many experts warn about purchasing a fixer upper as your very first investment property. It might be tempting to go out and purchase the cheapest available property, yet such tend to be homes that need lots of work and a good deal of cash to get shipshape. Generally, renovations cost big money unless you’re skilled to carry out the work on shoestring on your own or have a family member or close friend you could call upon, you will probably spend a lot on the improvements. If the repair isn’t that bad, finding a good buy does not mean that the property is not a good consideration. Again, you should do your homework and invest in the property that will make you money.
- Keep Everything Realistic
Take note how tough things were once you first purchased your home. It is frequently the same once you purchase your first investment property. Never expect to make money from the very beginning. Instead, concentrate on searching for the best property and get a reliable and solid tenant in place. The cash will come and once it does, it might be the time to searching for another investment property.
- Search for a Property in the Best Location
Location is everything and this is true, whether you are looking for a residential property or rental properties. In a city, search for some properties that are close to the schools, restaurants, and shopping centers. In suburbs, try and look for something that is close to the shops and schools. Everybody wants places that are accessible to everything.