Property is a great way to create wealth. Despite the various factors that may affect the property market- whether residential or commercial, property investment remains solid.
Property investment ensures a steady rental income and property appreciates in value.
While it may all seem easy and exciting, there are a number of factors to consider before making a purchase.
Firstly, you need to be clear about why you are making a property investment. Do you want to rent it out to tenants? Do you want to live in the property? Will you be using the property for business purposes? These decisions will drive the ultimate property investment you settle on.
Property investment tips:
Do the maths before buying an investment property.
Consider your long term goals.
Thoroughly research the area in which you are planning to invest.
Keep some money for utilities, rates and maintenance costs.
Remove the emotion when making a purchase. Make a decision based on what will appeal to tenants, rather than you own personal preferences.
Network with estate agents, as they are often able to find well-priced investment homes, at a much faster rate than you .
It’s important to ascertain what type of tenant the property will attract. Find ways to make the property attractive to renters.
Take a critical look at the area.
Make sure that you understand the taxation implications. For instance, there may be significant tax benefits for real estate investors.
Check your credit report before you begin investing in real estate.
Apply the 1% rule. An income-producing property must produce 1% of the price you pay for it every month.
Ultimately, an investment property should be about increasing your wealth and securing your financial future.
Choose the right property at the right price.
Make sure that you can afford to maintain your mortgage repayments over the long term.
Understand the market and the dynamics of where you are buying before you start to establish your property investment portfolio.
