Property investment has proved to be a stable, tried and tested method of wealth gain over the years, with purchasing the right property, at the right price and in the right location all contributing to potentially outstanding returns, blitzing any other asset class.
So if you’re new to the property investment world, what are the major do’s and don’ts you need to go by in order to be successful? Here are some of the important factors that will contribute to the overall success of your investment plan.
Identify the Location
In order to attract high quality tenants you will need to find suitable locations that are attractive propositions to potential tenants. The best place to start is to consider who your ideal tenants would be and choose a location that has regularly welcomed a lot of these tenants in the past.
Make a Good Purchase
Carry out thorough background research on the prices of properties in the area you have chosen and consider the price and content of what you are investing in. What is included in your purchase of the property? Is it fully furnished beforehand? Factor in the expenses that follow and ascertain if it is worth the amount you spend on it.
If it is one in a prime location, it is one worth considering because it is likely to give you more than a 100% return on sale in a few years. If you make a few renovations, you could increase its value and convert it to a rental property too, especially if it is a pre-owned home. Consider making a few changes – look around for new furniture if the old ones are worn-out; install a tub you can buy from a Bath Retailer Westside Bathrooms (or from one closer to you) to add a touch of luxury; make restorative repairs on cabinets, cupboards, walls, and more.
But if the location is not a popular one, you ought to be a little more critical of the condition of the place. This is simply because there is a lower scope for solid profits.
Use Appropriate Advisors
You need to be able to trust your mortgage advisor. You will almost certainly get the best possible deals from a reputable mortgage advisor who complies with your investment strategy. Don’t presume that all solicitors are off-plan specialists.
Research and Check the Numbers Over and Over
It’s been mentioned a few times already but I can’t stress enough how important research is to a property investment. You need to know the area you have designated from top to bottom, any refurbishment plans that are required and the nearby transport options among other things. Bars, restaurants and amenities should also come into your planning.
If necessary, consider seeking assistance from a property investment company. They can provide accurate data and numbers essential for making informed decisions, as well as guide you through the entire property investment process. Remember, you should purchase a property that supports capital growth and ensure that all costs are included in your financial projections. These include everything from legal fees, stamp duty and ground rent to service charges and contingency to accommodate void periods between tenants.
You Won’t Get Rich Quick
Property investment should be approached with a view to the long-term. It is important to build a sustainable portfolio if you hope to see the best wealth benefits over a period of time. However, you will almost certainly not enjoy dramatic wealth gains in a short space of time, especially if the property you have bought requires extensive renovation first. You may find the carpets, bathroom and kitchen need stripping out, so at the very least you’ll need to hire a dumpster. Renovation takes time and money, and whilst you can save some money by searching “Cheap Dumpster Rental Tampa” or something similar depending on your location, proper refurbishment of a property takes significant capital.
Don’t Rely on Emotions
Emotions are not what drive clever investments. If you spot an attractive property that YOU like, think about purchasing it for yourself. However, do not make a judgement on an investment property if it’s simply down to your emotional attachment.
Don’t Ignore Basic Supply and Demand Concepts
To find out exactly what’s needed in your chosen area, speak to local agents and record what they have to say. It is unlikely you will identify a location that requires both 1 bedroom apartments and 4 bedroom family properties. This is especially the case for University cities where smaller accommodation is highly sought after and family properties not so.
Article provided by www.propertyfrontiers.com, an overseas investment firm established in 2002 by David Cox.