Buying an investment property is one way to invest your money. However, this is not an easy decision to make. There are so many considerations to think through before you buy an investment property. It can help you secure your money’s value for your future, however a wrong decision could lead to a situation that could affect your future in the opposite way than you originally hoped for.
In this article, we will share with you five useful tips that you could use when buying an investment property so that you can avoid unwanted consequences.
Tip 1: Choose the right property at the right price
One main reason for buying an investment property is for capital growth. Therefore, you should make sure to choose a property that is most likely to increase its value.
For you to do this, you should do your homework and research the area where you plan to buy a property. By knowing the vicinity, you will gain insight into how the value of the property might change in the near future.
Buy a property at a reasonable price which has great potential to increase
Tip 2: Consult a real estate broker
You do not have to stress yourself out learning about real estate, mortgages, terms and other technicalities. You can do is hire a professional real estate broker, as experts in their field they can do the work for you.
If you hire a property manager to manage your purchase, they should be able to advise you on property law, your responsibilities and your rights as property owner.
Tip 3: Learn about the market and dynamics where you are buying
Do not just focus on the property that caught your eye. You should widen your scope and learn about the market and dynamics of the area where you are planning to buy. Talk to locals and business owners, and see if maybe another area is superior compared to the one in which you are currently looking to buy. It wouldn’t hurt to do some research.
Tip 4: Pick the right type of mortgage
There are many options when it comes to financing your investment property. However, you should decide which one is most suitable for you. You should pick the right type of mortgage – will you go for fixed-rate mortgage or is adjustable rate more suitable to your current situation? If the purchase is a business investment there are many more options and considerations including tax implications. In line with this, you should assess your financial capabilities to ensure that you will be able to pick the right type of financing.
Tip 5: Think long term
You should always remember that investments are long term. Yes, you may easily create income flow by buying and building apartments but at the end of the day, your mindset should still be long term as you may need to weather the ups and downs of the market. You should pick a property that you know will increase in value over time and something that will last over the years.
Buy an investment property with great caution and wise considerations. Use the tips mentioned in this post to help you come up with a profitable investment choice.
Sally Hollingsworth is a REALTOR® with Coldewll Banker Horizon Realty in Kelowna, BC. For more information visit her website at www.SallySellsKelownaHomes.ca or call her at 250 864 7548.