Investment

Property Investment Advice: 5 Vital Tips You Must Know

Are you tired of a volatile stock market? Do you want to put your money into an investment that is time-tested and sure to result in long-term appreciation?

If so, then you need to consider investing in real estate. It’s no secret that as the world’s population gets larger and larger, the world’s land supply gets smaller and smaller. The laws of economics dictate one thing: that the value of land must go up as supply reduces while demand exponentially increases.

If you’ve come around to this way of thinking, you need some sound property investment advice before you go out and buy your first real estate property.

In this article, we’ll take some time to share a few vital property investment tips and strategies to help you maximize the returns on your investment.

1. Turn Your Properties into Rental Units

One of the best real estate investment strategies is to turn your property into a rental unit after you purchase it. For example, it could be you want your existing home to become a rental or you set out to purchase a property and turn that into a rental. If you are able to do this right, the money that you earn in rent will be able to more than pay for the mortgage on the home. Essentially, you’ll be able to build equity in a home for free!

However, there’s a lot that goes into being a Landlord. As mentioned you need to purchase the right property, in the right location i.e. one that will rent well, so it attracts tenants and the rental income exceeds all your costs. Plus as a landlord, there’s the management of tenants and the maintenance of your rental unit. Plus you will need to learn the real estate laws pertaining to tenancies.

2. Buy a Fixer-Upper

The next real estate investment strategy to consider is to purchase a fixer-upper, i.e. a house that needs a refresh before you can rent it out. When you buy a fixer-upper, your focus is to get it at a great price i.e. at a discount so the price is less than the market value.

If you have any construction or DIY home maintenance experience, then you may be able to fix that home up to a price point well above what you bought it for in no time at all with comparatively minimal expense.

Renovations can be costly though especially when you engage third parties like painters, plumbers, electricians and so on. Therefore you need to have a budget and to make the numbers work your renovation costs plus your purchase price should be no more than the market value for the home.

3. Research Locations in Person

If you want to know how to get into property investment, it’s crucial that you understand that the top three most important things are location, location, and location. Location is what makes or breaks property values by and large. Make sure that you have a good understanding of whether the location of the properties you’re looking at will be desirable in the long-term by visiting the area in-person. You can never know too much about an area.
Study the sales and their sales prices so you know prior to purchasing what a property is worth before and after its new look.

4. Understand All the Costs

A mortgage isn’t the only cost associated with owning a property. You’ll also have to maintain the home, pay property taxes, insurances and pay miscellaneous fees if you’ve got a unit i.e an apartment in multifamily properties aka apartment blocks. Make sure that you understand all these costs before you take the plunge as looking after your unit also includes a fee to maintain the apartment complex with the cost shared between all the unit owners.

5. Leverage Property Management Services

Last but not least, property investors should use a property management service. Let someone less deal with the day to day issues and give you back many hours in a day. Many of the headaches that are part and parcel of property ownership, need not be your worry so property investment doesn’t need to be stressful.