Real Estate Market Investing
People would love to put in a little investment and then slowly watch it grow over time. In fact after a certain age, it isn’t possible for all to work and put in those hours. Their best alternative? Investment! Now, it isn’t necessary for one to grow old and only then think about investments, anybody can do it provided they have a significant amount. And what better place to put in this investment than the Real Estate Market Investing.
The Real Estate Market has been one of the time proven investment platforms. One which has provided good dividends and returns on investment over a period of time. But, this doesn’t mean that just because you have got a hold of money you just jump in and put it wherever you feel like. There are plenty of factors and points which need to be thought of before you make your final decisions.
Here are some of the things you should probably keep in mind if you’re looking to invest in Real Estate:
1) Covering all Known and Unknown costs
When we are investing in a property, we shouldn’t end up spending the entirety of our money on the investment, because in reality there are plenty of possible costs which we will still have to bear in the near future. Chances are that there are damages that need to be taken care of, or just general repairs and maintenance.
On the other hand we’ve got housing prices going down and up from time to time, now thats something we cannot predict or control. We need to be prepared for either case and be ready for all possible losses.
2) Don’t let your emotions run you
Lets face it. There are times when people just end up falling in love with particular properties simply because of the way it looks. The phrase “don’t judge a book by its cover” cannot be more emphasized in this case. Due to the general aesthetics of a particular property, people tend to develop an attachment to it and pursue it with all their hearts. This way they end up paying more than what is necessary and lose on the investment.
It holds true in the opposite case as well where one person is adamant about not liking property when it could possibly have been the best investment option out there.
A very realistic and non emotional approach needs to be followed while investing.
3) Investing in the right locality
Right after property, one of the most important factors of a good investment is the area or locality in which the property is located in. You probably need to do some research in regards to the rise in rentals over the months in that area. There is nothing to guarantee you that the property you have invested in now maybe worth more 10 years from now. But ensuring that you’ve invested in a good area can most certainly increase your chances.
Find places where you think a school may be contructed. Places where there are chances of job growth, upcoming restaurants and shops.
Also, be careful not to end up spending too much in pretty popular neighbourhoods thinking there will be good appreciation but in reality maybe no more room for it there anymore.
4) Finding the right tenants
The worst thing that could happen to you is finding bad tenants. Tenants who hardly pay their rents on time, or keep skipping them. Tenants who keep damaging your property eventually leading you to evict them.
It is advisable for you to do a little background check of your tenants or work with a professional property manager. Try to get in touch with their previous landlords to know whether they’ve struggled to pay their bills before. Its better to be safe than sorry.
Don’t be dragged into the false commitments the tenants might propose. Some are desperately looking for a place to say, and will blurt out whatever lies it takes for you to agree to them.
5) Understand your own Powers and Limitations
In all honesty, every person has their limitations. Some maybe be able to handle certain situations well, while others are helpless. For example if your tenant has plumbing issues, do you know what it takes to fix it? Do you know someone who can do it for you at an affordable cost? If not, then you’ve got a serious limitation.
There are instances where the tenant might call you up in the middle of the night to complain about the air conditioning not working. If that is something you do not want to be bothered with, you could probably hire a Professional Property Management Company to handle all these for you. But, of course, they will take a small fee for it or a percentage depending on your contract with them. Its up to you to decide whether you want to handle the headache or sacrifice a little of your profit.
So there you have it. General guidelines or things to keep in mind before investing. Real Estate can make you or break you depending upon how much homework you actually put into it. So don’t let chance be the decider of your real estate future. Use your logic, put in your efforts, do the math, and then see what fate has in store for you for Real Estate Market Investing.