You Probably Do Not Change Your Bedsheets Frequently Enough
- 19 October, 2020
- Tips and Advice
How often do you change or wash your sheets? We got you thinking huh? Many of us keep the same…
It’s a long established fact that real estate investment is one of the surest ways to growing personal wealth. With property, the key advantage (unlike other forms of investment like stocks and bonds) is the level of control the owner can exercise – full control.
As an asset, real estate is one of the only ones that can serve as valuable collateral. Real estate investment is an opportunity of taking advantage of today’s property and benefiting from it tomorrow as passive income.
If one commits long-term, they will reap rewards of a good return on investment as the value of property increases over time.
So what is real estate investing all about? It is very important to understand what it is and the market you are in before jumping in with both feet so that your venture is less risky. Real estate investing involves the purchase, ownership, management, rental and/or sale of real estate for profit.
Purchasing property to let it out has become more and more popular because of the successful owners have with getting positive cash flow from the investment. It’s a great way to make good money. If you are thinking about it, these 3 pointers will start you off on the right foot.
EDUCATE YOURSELF: Knowledge is power. As you endeavour to be successful as an investor the best first step is to gain a deeper understanding of real estate investing, home ownership and leasing.
Listen to podcasts, read real estate investment books, watch relevant TV programs and speak with others who are doing it and making good returns.
You have to do your due diligence in finding the right property and vetting renter. Try to make the investment as low risk as possible. Real estate investment is not a kpa-kpa-kpa (“get-rich-quick”) move.
LOCATION, LOCATION, LOCATION: Buy property in an area that you would love to live in. Potential renters are people also investing just like you and want somewhere nice to call home. Look for nice, moderate areas that are up-and-coming. Though they may be less expensive, avoid slow-developing areas that have many incomplete buildings and not much to offer in the way of amenities.
It’s a good idea to live in the property a few years before you move out and make it a rental so that you know of any issues that would be the same echoed by your tenants. It’s also not the smartest idea to invest in fancy high-cost apartments or vacation homes that will not bring you rental income year-round.
MINIMISE INPUT: If you have found a reasonably priced property and want to buy it as a rental property investment, that’s great! Check out the property very well during your property search period with this house hunting checklist to ensure it doesn’t have obvious and hidden maintenance issues that will cost you a lot to bring it up to par for renting.
There’s no point in buying a place that requires a lot of fixtures, expensive repairs, upgrading, and constant managing. Being a nice landlord is also good. If you develop a great relationship with your tenants, they will make s
ure to care for your property to reduce hassle.
A good real estate investment – whether intended as a rental property or personal residence – is one that you stand to make much more from than what you put in to get it, in the near future.
When you put in invested cash equity – which is the property price (down payment + closing costs + renovation costs), your net worth should increase at a fair rate in comparison. Real estate is risky business but if you apply these basics, you should be on your way to positive returns (good cash flow and part appreciation in property value).