Is Real Estate Still a Good Investment?
For many people who want to get into investments, the property market has always been the best idea. Property has been a good long-term investment, and even when the market is fluctuating, it still remains a favourite. However, there are some that feel property is becoming less of a secure way to get a passive income. Below are some of the things you need to consider when thinking about real estate investment.
Paying with Cash
Buying property is an expensive business, and there are many investors who believe you should be able to buy your property without having to resort to getting a mortgage or a loan for the money. If you do have to borrow the money to afford your property, then it is vital that you can manage the repayments, even if you are not getting any money from the house. If you are planning to rent the property out, you might get a fast turn-over, so you need to be able to pay the mortgage while the house is empty.
Plan Your Expenses
Before you buy your first property, you need to consider all of the expenses that you might incur from it. For example, it will likely affect your taxes, so you should speak to someone such as those companies that can do your tax return for you. They will be able to give you advice and ensure you are able to accommodate the expense. Other expenses can include utilities, repairs and upkeep of the property. You could hire a real estate company to look after the house for you, but this adds another expense to your list. These are other costs that you will need to be able to absorb if the house is empty.
Research Your Property Carefully
It is important when selecting a property to buy that you fully research it first. You need to see if there are any roads planned nearby, or if there is a large construction planned. These and other plans could seriously affect the value of your dwelling and also put some people off renting it. If you are not sure about what developments are planned nearby, or if there are rumours about this area, then it might be better to avoid the property.
Start Small
Some people, for their first investment, buy a big property or a duplex, although this is a large cash investment. If you start this big, you will have multiple tenants and tenancy agreements to deal with. Even if you get a company to help you, there is still a lot of work involved. It is better to stick to one property with one tenant, so you can get used to the process and gain experience. You can then move on to more properties in the future.
Planning your first property investment is exciting as well as scary, but if you research properly and have your finances in order, then you should be able to succeed in your investment.