Real estate on it’s own has produced some of the most wealthiest people in the world, making property investing, one of the sound investments people can get into. It’s also amazing to see many people are only fascinated by the ‘wealthy‘ part of the entire process forgetting the most basic aspects when buying a property
Earlier this month we discussed an article regarding why people should start investing in real estate at a young age. This approach will give you an opportunity to learn more about investments, make your research and arm yourself with detailed information before getting into the industry.
If you’re going to try getting into real estate or investment properties, the first and best thing you can do is to understand what it is, exactly what is investment property. In simple terms, investment property is buying a property and not living in it. The moment you purchase a real estate and live in it, it doesn’t become an investment but liability. Remember the idea of investment is to at the end get some sort of returns in the investment itself.
What to consider why buying investment property?
There are couple of things to consider when buying a property, below are some of the basic things to keep in mind in the process.
Is it really for you? – While you’re in the processing of searching a property, please make sure you find the one, the property you like and can live in, even though we know you’re going to rent it out. Do a thorough analysis of your finances, be realistic about your financial commitment. Find a property you can afford and located in the right place.
Is your tenant the right one? – We now know for a fact that as an investment property, you’re obviously going to rent out your property, in that case, you need to put a considerate tenant in there. Someone who is going to help grow the value of your property overtime. keep this in mind, the whole investment is your little business so during interviews with the tenant, try to find out more details about them. it’s very important that you do background checks so that you don’t rent out to gangsters and fraudsters in your property.
Beware of principle debt and interest rates – In the process, please make sure you understand your principle debt or the loan amount as well as the interest rates. You know borrowing money may be cheap today however as time goes you realise that the interest rate is more higher than expected. If you’re buying a sectional property, be sure to understand all the regulation policies before signing off your offer of purchase. Let your estate agent get all the necessary information about the state of the property, how much will be your levies and rates. This information is important to help manage your monthly cash flow.
In order to be financially free with this investment, please ensure you pay your debt first, let the tenant stay in your property to help pay out the debt a lot more quicker. The quicker you fully pay the property, the more benefits you will enjoy for the rest of your life.