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These days we are seeing a number of entrepreneurs and business tycoons making fortune with real estate investment. Real estate, like every other business, requires proper knowledge, experience, and a heart to take many risks which are associated with it. Moreover, no matter which property type you are purchasing or what you are planning to do with it, property investment requires a hefty amount of cash, which makes it critical to take extra steps to ensure a profit or lessen the risk of loss. This has been observed that lack of property in good areas creates a good opportunity for investment. However, it’s still a myth that just investing in real estate can earn you a fortune, it is not that simple. At 10 Properties in 10 Years, our property mentor in Preston suggests a number of things which you should know before buying your first investment property.
1. Decide Wisely
When purchasing a home, people often listen to their intuitions rather than thinking about it logically, which is absolutely fine because it would be a place where you have to live for many years. However, don’t let your emotions come in a way of your decision when purchasing your first investment property. Think as a pure businessman and logically make a decision to get the best returns in future.
2. Do the Research
Not only property investment but for any business, the research is essential. Find out the clients you will possibly be targeting, likely the location of your property and the clients it will attract, and what returns you should expect from the current market will your property appeal to the market? It’s all about economics, doing proper research and keeping an analytical approach based on the financial factors will help in buying the best property.
3. Secure a Down Payment
20% down payment is at least required for buying an investment property. Since the mortgage insurance is not applicable for investment properties and it also requires bigger down payments as compared to your regular building with strict approval requirements. You’ll also need some money for the renovation before you pay your down payment.
4. Make a Calculation Beforehand
Doing the calculation before jumping into a decision is a better idea, it can save you from possible problems you could face. Keep an eye on every detail beforehand, calculate the money you already have and the loans you are taking to buy your first investment property. In the next step, calculate how much would it take from buying to renovating the house. Keep in mind the little operation costs and expenses here and there. In the end, cut out the expenses from the estimated property price to get a rough idea of the profit you are going to make. Make this calculation to keep yourself in a safe zone.
5. Start Slow When Buying First Investment Property
As far as property investment is concerned, don’t go all-in from the beginning, start slow and steadily make your way up to the top. Even if you have a million dollars in your bank account ready to be spent, it’s always a better idea to go for properties that fall between lower-to-mid-range price brackets. Investment advisors in Melbourne suggest buying a property which costs you nothing more than $150,000. Keep in mind that you will need money for the renovation of the house before putting your property on the list. Our team of experts at 10 Properties in 10 Years will guide you step-by-step according to your plans and provide you all information you need to succeed. To get in touch, give us a call at 1300 617 677 or leave us a message at [email protected].