6 Ways To Tell It’s A Wise Investment
There is no bigger investment in life than purchasing a property. So it’s only natural that considering your first, or even second or third property investment can come with a lot of palm sweating, late night pacing and high levels of uncertainty and confusion.
So how can you be certain that the property you are considering buying is going to be a good investment? Follow the tips below to make sure that you are putting your money in the right place to ensure you can make that investment with confidence and security.
Look into the Local Market
Looking into the property market figures in the areas that you are considering is a good place to start. You want to make sure that you’re not buying at the peak of the market, as all things that go up must come down. You want to be looking at areas that are on the rise and will offer a location whose property prices are set to increase, thus ensuring that the value of your property will go up over time. Looking for an investment property hotspot where buyer activity is really strong, in a location that is being developed and invested in means that you can be sure this area is going to become more sought after over time.
Looking at areas that have already peaked, where the property prices are set to begin falling is not an area that you want to be focused on. Immerse yourself in the world of real estate in your area and begin understanding the areas pipped for growth and then focus your attention there.
You will also want to look into the local job market and overall strength of trade, commerce, and business in the local area. Even if you are happily and stably employed at the time, this could be a factor when looking to sell to others who are maybe looking to relocate to your area and start afresh.
Are there any urban renovations happening in the area, such as new public transportation links, major roadways being added or perhaps future plans for new parks or shopping malls. In a nutshell, if the area is being invested in and is growing healthily and moving forward in a positive direction you’re likely considering a healthy area for investing.
Up and coming areas should always be of interest to potential buyers, but it’s not advisable to risk piping for a bad, poor, or dodgy neighborhood just because it’s cheap and you ‘hope’ that one day it will improve and fall into the desirable bracket of ‘up and coming’. This could be setting you up for all sorts of problems with undesirable neighbors, unreliable tenants and you could be waiting a long time for any sort of investment or development to begin in that area.
Figure Out Your Individual Wants & Needs
Think about your objectives for this investment. Are you buying to let, looking for a renovation project, or needing extra space due to an expanding family? These are the kinds of key objectives you need to factor in when looking to invest in property.
Buy to Rent
If you’re looking to find a flat that you can rent out to earn extra money then you need to be looking at flats that are going to bring the money in. You need to calculate what your mortgage payments and monthly outgoings would be (make sure you factor in extras such as service charges, taxes, insurance etc) then look at how much you could charge tenants in that area, with the specifications, in order to calculate how much money you could be earning each month.
Don’t allow yourself to get carried away, believing you can charge more for your two-bedroom apartment in an area whose average monthly rent is much lower. You would be setting yourself up for a fall and lots of frustration when you don’t reach your rental goals. So do your homework and your calculations thoroughly.
Perhaps you’re looking for a ‘doer upper’ and fancy rolling your sleeves up and getting stuck into a renovation project. In this case, you will need to hire the help of a good surveyor to look at the overall foundation and structure of any old and tired properties to make sure you don’t get stung with huge, unexpected costs, such as roof replacements or faulty beam structures.
Making sure you don’t encounter big structural problems as you go will mean that you can stick to your renovation budget easier and don’t have to start chipping away at the overall profit you were wanting to make from the finished project.
If you’re looking to buy a family home for your growing brood, then you need to look at the what is available for families in the local area. You will need to look into the local schools, understand if it’s a family friendly area with lots of support and facilities for families and children and you’ll need to look into whether this is an area you can truly see you and your family settling into.
If you’re finding the whole process a bit of a headache you may want to think about hiring a professional property manager to take over the reigns a little and help point you in the right direction. Yes, a property manager will cost you one month’s rent by finding you a tenant for your rental property, but they will also make sure that you are covered legally for every eventuality as a landlord.
They will help find you a reliable and trustworthy tenant and will reduce the time and stress you may encounter going through the process of finding a tenant quickly, so you’re not wasting months with the flat sitting emptily. From there they will be able to manage your property and take care of any expected issues that may arise and deal with the overall liaison with the tenant so you barely need to lift a finger.
If you’re looking to buy a home for you to live in they will be able to help you look into all the above points to make sure you can go into your property investment, confidently, happily, knowing you’re putting your money in the right place. Making A good investment is more complicated than you might think and it’s important to make the right decisions.