♠ Posted by Unknown in Real Estate Investment Tips
Everybody makes mistakes, but it’s learning from them so that you never repeat it again. Property is a great way to generate income, as it can secure you financially for your future. So in order to ensure you don’t make any bad investments in property, here are 15 points which will make sure you apply the right solutions to succeed in your investment in property.
1. Always try to purchase plots for sale at under market value property as many people see it at a risk as to whether the property price might rise, but in this case price is not the important factor. It is finding those desperate sellers who are willing to sell their property at an under-valued rate. Under market price also gives instant equity and a buffer if the property prices were to fall further.
2. The importance of knowing your cash flow is vital, as it is good to set aside a reserve amount for unexpected expenses. It is also essential for having a buffer in mortgage payments and to counter the rising interest rates which can dent your monthly profits.
3. Many investors base their business models on capital appreciation and ignore running their portfolio. It is a very big risk. Remember to never buy with emotions you should recognize to turn away more deals than you buy. Ensure the yield is good, and consider all costs.
4. It is crucial that you do a thorough research and the necessary due diligence before you make such a big investment. Have a strategy in place as to why you are buying this property. Do not make the mistake of buying the property because there is a huge discount available on it.
5. Do not invest in property if you lack an effective investment strategy as the strategy should be based on your personal financial situation, you attitude towards risk. Other thing to consider is how much time you can afford to put in your property business.
6. If your property requires a little makeover do not get sucked in and try to refurbish the entire place as you might be disappointed when you sell the property and you realize that it does not go for much after all the hard work you have put in. Factor in your profit and loss as see if the project is worth that much of investment.
7. Try to ensure you keep your emotion in check when negotiating with property as sometimes or most times it may not go your way. Do not chase deals; let them come back to you. Like the old proverb patience is a virtue.
8. Biggest mistake new investors make is selling their property, because when you sell, you are transferring your wealth to someone else. Because most investors are not investing for long term. Selling your property continually reduces your long term wealth and asset base.
9. Do not get sucked in to the bandwagon of investing property in a foreign country, as many investors are tricked into purchasing the property because it has some fancy artwork or a great view and assume it might have good resale value.
10. When you plan to purchase ensure you do not buy a property next door to unruly neighbors as it can have impact in your investment as it may not be an easy sell. And ultimately you would have to pay the price.
11. Make sure you do not fall to any of the builders scam as it sadly happens more often than you think. These shady builders are smart and at the start to extort money from you they will be very friendly and casual. But remember you are smarter and beware of them and you should be susceptible to any of their cons.
12. If you have just started in investing in property make sure you buy a property with title issues. But if you know what you are doing then it is fine to invest in problematic properties.
13. Never buy a property because you feel you like, when making an investment like this ignore what you feel about the property, see what investment value and worth it has to you in the long-run. It is an art to think with logic and not your emotions.
14. It is better to be truthful and honest and not fabricate your selling and investment history, when you’re starting out, be brutally honest, yes you may lose a few deals but it’s better to have moral ethics. In the long-run you may attract more buyers and more property deals.
15. When you are investing in property you have to identify the right people to invest with. Being dishonest will eventually get you caught. With the advent of social media your name can get tarnished and the entire world will know about it. Reputation is vital, so try making a good name for you because people will remember someone with a good reputation but people will never forget someone with a bad reputation.
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