While these factors add up from the investors’ viewpoint, the final success story involves additional characters. It was easier to gauge the success or failure rate until the COVID-19 pandemic crushed the entire world, impacting not only animate humans but also inanimate things like real estate.
If you are considering a property investment, it is crucial to consider the pandemic’s impact. The global outbreak has compelled many people to rethink how long they can stay in their present homes before having to relocate to a new and safe location.
In communities where a large number of people were infected, many individuals are considering selling their houses as a preferred option so that they do not miss out on the early profits or lack of demand down the road.
Moreover, strict norms to curb the spread of the virus have made it difficult for both property sellers and buyers to engage in frictionless transactions. Immediate repercussions include shockingly declined property sales, an abrupt increase in cost and people abandoning their properties in the metro cities, throwing the market into a depressing state.
Currently, the real estate market is in a volatile state and witnessing change on different levels. With the abrupt change in policies of governments, the real estate market is in flux, which affects its stability. Owning a property is getting more challenging for people due to the rising interest rates on mortgages.
Still, people are looking for ways to make money with property investment. If you are one of them, then the following tips will help you create the right mindset and plan.
Select The Right Location
Selecting the right location for your next property is half the battle won. The location should cater to everyday needs by being close to grocery stores, restaurants, cafes and public transport.
By choosing the right location, you kill two birds with one stone, i.e., better resale value and higher rental income. Right location means having all the amenities nearby, which allows you to quickly sell your property once you decide to move on – best if you have a money-making mindset.
Moreover, the value of property bought in the right location and at the right time will rise over the years due to appreciation and capital growth. The demand will also grow because of new development projects like residential buildings or shopping centres being built nearby.
Get Proper Insurance
Getting the proper insurance is essential when you consider investing in a property. Insurance should not just be for your home. It is equally feasible for your next property. But the question arises – why is insurance crucial for your property?
There is a multitude of reasons for having your property insured. Without proper insurance, it will be next to impossible to get compensation for mishaps like a fire or burglary. It is safe to say you will have to bear the burden of any untoward events alone.
Also, it is recommended for landlords to get insurance by paying a small subscription fee to an insurance company today and get a guarantee in exchange. It comes in handy if you are planning to rent out your property to tenants. Insurance companies will be responsible for bearing any large and uncertain loss that may happen due to mishaps caused by tenants.
Define Your Investment Goals
Understanding your investment goals is the next big step in your path toward making a profit from your property. Defining these goals is not easy. You need to be realistic and measure your goals in the long term.
That means if you are looking for at least 20% appreciation per year, which might not be very realistic considering the property location and current circumstances, then you need to be more practical in your approach.
Also, you should stick to a time-bound strategy when it comes to investment goals. It would mean forging a strategy that includes both buying a property and selling it at the right time, allowing you to attain your investment goals more quickly and efficiently. This way, you will likely save yourself risks that might occur during your ownership period.
Lastly, you should be more specific in your investment goals, which enables you to clearly navigate your property investment journey and fulfil your goals without any fuss or additional cost. If you are clear and realistic in your investment goals, then there are good reasons to invest in property right away.
Analyse Financing Options
Analysing the available financing options will place you in a better position wherein you can better understand and anticipate the overall interest and other crucial factors. It requires extensive research on your part, so that you know the current interest rates and check their feasibility.
Checking your credit score is an essential part of this step. That is because lenders are likely to prefer individuals with satisfactory credit scores. But what if your score is not up to the mark?
Fret not. If that is the case, you should be quick to implement the steps and improve your score, which will save you during the tedious approval or pre-approval process.
Another financing option could be a home equity loan, wherein you can secure an investment property. This option usually offers around 80% of the home’s equity value, which you can use to buy your next dream property.
Consider Long-Term Expenses
Considering long-term expenses is the next step if you are looking to accrue some financial benefits from your investment. Carefully think through the different expenses that aren’t included in the initial purchase price. These expenses include maintenance and renovation, property taxes, annual insurance charges and more.
To get an estimate of these expenses, you need to analyse the previous bills and communicate with homeowners who have been living in the neighbourhood.
Hence, it becomes all the more important to keep in mind these long-term expenses before plunging into a seemingly optimistic property investment market. That means analysing whether you will get a higher monthly rent or mortgage than the monthly cost of maintenance and repairs.
By taking into account all these factors, you can make a more informed decision that will not only be right for your investment needs but will also give you fewer headaches down the line.
Investing in a property can be a lucrative option once you keep these tips in mind and make your decision based on all the factors listed above. In the post-pandemic world, the outlook of property investment is gradually becoming promising, making it great even for beginner investors.
For those looking to buy property as an investment, make sure you do not put all eggs in one basket, meaning do not invest every penny in your next dream property. It might prove dangerous if your property fails to give you the desired rental income, which happens in many cases. So, place your mindset in the correct order and stay in the game for the long term to survive and win in the end.