Property investment is something that most of us have considered at some point in our lives. Getting started in it, however, is a completely different story.
It’s a big leap to take, but it can seriously pay off if you get the market right. In this article, we’re going to take you through the basics of how you can get involved in property investment – the smart way.
1) Keep an eye on your finances
Surprisingly, many people dive head-first into property investment without actually knowing how much money they have to spare. Although real estate is a relatively low-risk option, you shouldn’t ever invest more than you’re willing to lose.
By checking up on your finances, you’ll be able to look at the market from an educated viewpoint and know exactly how much you can stake in a property.
2) Get pre-approval
Speak with your lender or mortgage broker to get pre-approval sorted early on. If you’re not in the right financial situation to take out a loan right now, it’s best for you to go through a broker. Every time you put in a request with a lender, a record gets filed against your credit score. If you have too many of these, a lender can refuse your official application.
3) Set clear goals
Going into a property investment blind is a bad idea, as it’s easy to get overshadowed by just how momentous a task it can be. Before you get involved, set yourself clear goals.
Many investors get into the real estate market in order to secure their future financially. If this is your goal, you first and foremost need to set out what you expect to get back in returns from your investment each year. Set clear deadlines too and you’ll be able to work backwards from them to get everything accomplished in time.
4) Be aware of the risks
As mentioned, any investment comes with an element of risk and it’s this is exactly what will shape your strategy.
By understanding the risks surrounding property investment, you’ll be able to make more educated decisions as to where you put your money.
5) Budget yourself
It might not be the most exciting thing, but budgeting is the only real way of making sure that your money is going to the right places.
Before you even begin to look for an investment property, make sure you’ve got a robust grasp on your financial situation.
6) Set out a purchase plan
Purchase plans aren’t the easiest things to arrange, but they’ll definitely help you. In the long-run, it’ll definitely assist you in growing your portfolio to the point where you can be financially independent.
Here are some of the key points you should lay out in a purchase plan for property investment:
- Set out your criteria
- Define your overall investment strategy
- Get an appraisal
- Perform due diligence
- Make and negotiate an offer
Overall, the key to property investment is tenacity. It won’t be easy, but don’t give up. Just picture yourself 10 years down the line on that beach, whilst your portfolio ticks over in the background.
If you are ready to jump into property investment, click here to find your local Real Estate experts.