Putting your money on investment properties is actually one of the best ways to secure your future. Because it's a lucrative market, there are many opportunities today available in real estate. But, while investing in property is one sure-fire way to ensure your success, this doesn't mean that you can just sit around and be lenient about it. Especially as a beginner, you've got to be willing to put in a whole lot of effort so you can start enjoying its returns.
The thing is, there’s no one-size-fits all approach to property investments. Depending on the kind of property you have right now, this will need an individualistic approach, to guarantee higher results. There are generic ways, failproof by experts in the industry, to ensure that you can grow your wealth through your property investments. After all, surely this is what you’re after.
Read on to find out about some great property investment tips for beginners.
1. Stick with Your Property Investment Strategy
Because you’re still a newcomer in the game, it’s highly recommended for you to have an agent or adviser working together with you. That way, you can have a more in-depth understanding of the investment property market. The more that you know, the lesser the likelihood of committing regrettable mistakes.
Your real estate agent or investment adviser will help you plot your very own property investment strategy. Once this is done, stick to it all the time. Otherwise, you may only get lost and confused in the sea of investment options and strategies that you aren’t still well-knowledgeable about.
Just as a house needs a solid foundation to stand, the same holds true for you as well. If you want your investment choices to prosper, you’ve got to give yourself solid foundation through the strategy that you’ve decided to undertake.
Here are some examples of property trends that should help you in mapping out your investment strategy:
· Demand: The demand for properties will always be strong, given that housing is a constant need. This means that whether you’re going for residential properties to have rented out, or commercial apartments, you’re sure to have buyers or tenants.
· Price: The price of properties will also continue to appreciate, because of the rising demand for housing. As an investor, this means that you should take advantage of a very good deal and low prices that you can find. The profits will come by itself, as you can also demand higher rentals based on the rising prices of properties.
· Location: The location of the property will always be a premium. So, you’ve got to strategize to ensure that all your investment properties are in good, or at least promising, locations.
Visit some website online such as https://www.peregrineprivatecapital.com to learn more about potential investment property options.
2. Have A Strong Network of Investment Peers
Because you’re still a beginner, it pays to have a strong investment peer network. This refers to the group of professionals that can help you make a sound decision, manage your investments, and your returns. While you may be able to do everything on your own, it pays to have expert advice from those whom you know can help you on the road to success.
However, remember that not all experts may have your best interest at heart. Some may try to take advantage of your lack of knowledge. To avoid this, ask around before hiring one. If you’ve got friends and relatives that have also ventured into property investments, perhaps they’ll know of people who are trustworthy enough. It’s very important for you not to rush any decision regarding your investments, else you may fall into costly pitfalls.
It’s also advisable to hire a property manager. These professionals are well trained and can guide you about the various property management aspects that you need to consider. The professionals that you employ should help you find properties that fit your budget as well as ones that fit your requirement.
Some of the other professionals you’re going to want to hire include:
· An Accountant. This professional is someone who can help you manage and handle the finance aspect relating to your investments.
· A Broker. This professional is a constant, who’ll consistently be on the lookout for competitive properties, and help you haggle through the price to make it a better deal.
· A Mentor. This can be anybody who has “been there, done that.”
3. Choose from A Strategic Location
The next tip for beginners is to buy a property that’s strategically located. This means that the property should be bought depending on certain factors. For example, it should be close to a hospital, a good school, shopping complexes or major commercial establishments. Families or professionals looking for a home to rent will choose those options that have these establishments in close proximity.
If your investment property is geared towards student rentals, then you must also consider the needs of students so that your properties will become attractive to them. As much as possible, choose those that are near schools, so that the commute time will be lesser. It should also be in a student-friendly environment. Otherwise, if the location is known to be a dangerous one, then your investment properties won’t have tenants. Hence, it doesn’t earn the profits you desire.
Choosing a location will affect the success of your real estate investment property. Most importantly, all these factors are important as they’ll increase the demand for the property and therefore ensure its marketability.
It’s also for this reason that a real estate agent will come in handy. If you’re not from within the locality where the properties are located, then the agent can give you honest advice, as a local, regarding the merits of the location. They’ll also know how to maintain these overseas properties, so that even when you’re not around, they still stay marketable. After all, they know more about the place and the local market than you do.
4. Understand the Tax Implications
As a beginner, one of the most challenging aspects of investments is the finance side. This is especially true if you didn’t finish with a business degree, or if you’ve got zero know-how at all about investments. Going even further are the tax implications. These are difficult, but you’ve got to get it right. There are numerous taxes you have to pay yearly, and one wrong amount can affect your business’ financial documents.
Hence the need of an accountant, so that you can fully understand about how taxes work. Apart from the payables, understanding taxes can also save you a lot of money in the future.
Alongside the taxes come the legal aspects of buying and earning money through property investments. These are also complicated, but a good accountant can iron all these out for you.
Apart from the taxes and the laws, here are other benefits you can gain from retaining an accountant:
· There’s now a professional who can help you keep track of your finances. These accountants can be helpful when it comes to coming up with the financial reports that businesses must submit to the IRS (the government).
· They can file all your business documents accurately, as they’ve got extensive knowledge of the filing requirements and procedures that must be followed.
· They can provide a professionally-written business plan. This can serve as your blueprint for all other investment decisions you’re going to make regarding your properties. Your business and financial plans are going to be more accurate, simply because of the data that an accountant can provide about each of your properties.
In sum, an accountant can save you time, money, and increase your productivity. You can focus your attention on other facets of your investment properties that may be important. All your business decisions are going to be stronger, given that they’re now data-based, with the help of your accountant.
5. Check Your Finances
Each time you’re going to purchase a new property for your investment portfolio, be very careful not to go over budget.
Remember that you’ve also got to factor in your return on investment. So, if the chosen property doesn’t seem promising enough for its price, then you’ve got to move on with other property options instead.
It may seem like a very obvious tip, but your finances will first have to be in order before you purchase even more properties. Check how much you can afford. If you have to borrow money, then compare and double check loan options with the most generous rates. If you’re taking out a loan, make sure you’ve got a preapproval first before even closing on a deal on the property.
Be sure you crunch the numbers twice – thrice if you can. Factor in all the possible expenses you’ll meet such as filing, tax, and even the repairs. This is the only way you can have a higher guarantee of a smooth investment plan.
If you’re a first-time property investor, you can surely use a tip or two about property investments. It’s normal to feel uncertain about the whole process, especially when you also don’t have any business background. That’s why you need advice from people who know the ins and outs of the trade. Investing in real estate is a lucrative investment form, but it also comes with a hefty price. Hence the need for you to be extra careful. Remember that the goal is for you to earn – not to be on the losing end. With these tips to guide you, now all that’s left for you to do is to evaluate your strategy and options. You can have years of enjoyment from your investment without having to worry about financial problems, with the right strategies in place.