Investment property is an excellent way to make money either as a full time occupation or something on the side. However, it can be a stressful (and sometimes financially straining) ordeal if you get involved before getting sound property investment advice. Here are some helpful tips before you get started:
The price is right
One of the most common investment mistakes is buying a property at too high of a price. When you are considering a purchase of property, make sure the proper research has been done and that you would be getting the property at a profitable valueâ€¦otherwise, you'll be losing money before you even get started.
Good property investment advice invariably includes managing an individual's cash flow. For example, if you are investing in property that will be rented, you need to be aware of the costs involved in maintenance, upkeep, payroll, etc. for owning the property.
What happens to your cash flow if you don't find a person to rent your property within a short period of time? You will still need to be able to pay the utility bills, taxes, etc. on your empty property. Make sure you know the going rate for property managers (if you need one) in the area, so the fee won't surprise you. Be aware of the possible obstacles before you buy.
When you make a particular property investment, what are you planning to do with it? More than likely, you have a specific plan in mind, but what would you do if that plan became unattainable after you've already made the purchase? For example, how would you manage the following situation?-You've purchased a property, foreseeing it being utilized for a certain type of business, but after purchase, you are informed that the current zoning won't allow it.
One tenet of good property investment advice is to be prepared to be flexible with your investment. When coming across a possible investment, make a sound list of possible uses and try to research the feasibility of these uses in advance.
Be "In the know"
Speaking of research, as an investor, it is always in your best interest to know the current real estate/property market trends. Buyers can't just assume that just because the physical condition and structure of a property is solid and attractive, that its value will automatically appreciateâ€¦those days are long gone.
Make sure you know what the market is like in the property's location and research other similar businesses in the area and track their progress. This is extremely important, especially if the property that is being considered is in area the buyer is not familiar with. Also, be aware of all of the costs involved with purchasing the investment beforehand. Some of these may be considerable and even the smaller "hidden" charges are sure to build up to a surprising level.
Don't forget the taxes, either. If you know ahead of time what the total costs are going to be, you won't be crushed by these unpleasant surprises when it comes time to sign the dotted line. Going into a possible investment venture with good knowledge of the market already puts you at an advantage.
We all know that paying for help can be a bit of bite to the wallet. However, paying for professional property investment advice is often a wise investment in and of itself. You might pride yourself in your business acumen, but you shouldn't allow pride to be an obstacle. If you require clarity during the investment purchase processâ€”ask for and pay for professional help. Don't make what could be a costly mistake because either you were too proud or too budget conscious to pay for some sound property investment advice.