How To Invest In Property
Do you want to become a big property tycoon? Baby steps first. Before you begin looking at properties, you need to work out what type of property investor you want to be.
Do you need partners to start out with, or do you want to join an already established group of investors? If you start off by yourself, you will be the only one who will reap the rewards from your investment. However, can you afford to buy on your own or do you need that financial backing provided by a business partner? It is suggested that you start off by knowing your financial status as to whether you are going it alone or with a partnership.
Count your pennies first and see if you can purchase a property and work out a budget for how much you will be able to afford. There are some standard expenses to consider at first as well. Stamp duty, land tax, obtaining a mortgage and the day to day running of the property. Are there any major repairs to be done at first (or soon), only to mention a few important points to begin with. Don’t forget about the all-important insurance, which without, you might not be able to purchase to begin with. Nobody wants to pay for an investment without having it sound and secure financially, in case of an unexpected problem or disaster.
What is your aim to begin with? Is this a new career for you? A source of extra income or your main source of income? It should not be a get-rich-quick scheme. Take your time and decide what you want to do with it. Where will it take you in five to ten years from now?
You need to decide where you want to start. What does your research tell you about the average cost of buying a house? What you can charge as rent/reselling in that specific area. Do you even want to rent, whether to individuals, families or students? What amenities does the area comprise - a university, shopping malls or small convenience stores? Will your property value go up within the next few years?
You also need to consider the fact that you are not going to be able to buy now and make a profit right away. You should consider having a bank account for the property, separate from your personal one. This will allow you to build up a reserve for ongoing maintenance, any big-ticket items you may see coming, for instance the replacement of gutters or roofing in the next two to three years. When you eventually sell this property, will it make you money or will it have drained you of your own nest egg?
If you have decided to go ahead, just keep in mind: Rent is not always guaranteed – which may mean that you can’t afford mortgage repayments. Never have your property standing empty unless you are using that time to renovate or if you are doing some well-needed maintenance. Keep this to an absolute minimum with regards to time frame. Prices can always fall. You never know what will take place unless you have something happening or being built in the area in the future, that will boost that income. Pick your tenants carefully, but you ever know what could go wrong. Make regular check-ups on the house to keep tabs on the renter and the state of your property. Start off with every three months, using maintenance check-ups as your back up and once you are happy with the tenants, start doing it every six months and so on.
This could be the start of a whole portfolio for yourself. When you have decided you can handle the property investment business, start doing your homework on your next investment, be it in housing or commercial. Remember to speak to a professional if ever you require the assistance in sourcing a good property, or with general queries/assistance. Metric Investments are experts in this field and are always there to guide you towards your financial goals in investing.
Good luck and happy investing.
