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Top 10 Real Estate Investment Tips
- Knowing your budget – Know how much capital you can borrow and how much is dependent upon the current market.
- Account for ongoing costs – Make sure you budget your money so as to be able to afford repairs, insurance and rate changes.
- Invest in a growth area – Research your area well before you decide to invest. Just because your best friend guarantees it’s a good area doesn’t mean that it is.
- Realistic Goals for Investment – Plan out your investment goals beforehand. Are you trying to have fast capital growth or sustained growth? Do you want to quickly resell your property or hold onto it for a prolonged period of time? Research will pay off; find out if we are going into an economic boom or downturn.
- Time or Money Equity – Figure out beforehand if you want to pay a little extra and get the property up to scratch quicker or you want to save on spending more cash by doing it yourself.
- Style can be deceiving – Just because the property looks amazing doesn’t mean it is an amazing investment and just because a property looks like a hurricane has been through it doesn’t mean it is a bad investment. Know the area you are investing in and it can score you a bigger dividends.
- Use your head – Emotion can’t come into investment. Maybe this property you’re looking at has one of the best views you’ve ever seen. But if they are asking too much or a renovator’s worst nightmare it could cost you money. Evaluate your investments before going all in.
- Negative gearing – Every property expert on the market tells you investment is easy and you just have to negatively gear your properties. This can have great tax advantages but make sure you can cover the loan repayments. If you’re cash flow isn’t up to par then this can cause huge financial stress. Budget, budget, budget.
- Own your own home – Now you don’t have to own your home before you start investing in property but basically you don’t’ want to be in too much debt that you are uncomfortable with investing elsewhere.
- Inspections – Make sure to get the building inspected before signing anything so as to make sure you aren’t in for any nasty property repair surprises down the track.