BUYING INVESTMENT PROPERTY
Buying Investment Property is a particularly hot topic at the moment, especially in a falling market. While it might seem like two different topics, purchasing a home for yourself to live in and buying an investment property has similar characteristics as they will both eventually sell at a profit with the right strategy. This reasonably typical route to wealth is the old buy and hold approach which is easy to understand. The benefit is that it’s not as volatile as shares or bonds, which makes it even more appealing to the average investor.
Investing in residentially sound areas has proven to be a good investment over extended periods. The general rule is that as long as you choose the right property and buy at the right price, it will generally prove to be a wealth establishing investment for you. However, it is essential that before you rush in and purchase any property, you do your homework on it. It is necessary to ensure you don’t lose money on your investment and end up in financial hardship!
Buying Investment Property in the right areas is the key. The right area involves areas that are convenient for the majority of the population. This means near public transportation, near the shopping center, and education facilities.
Several expenses need to be accounted for and taken into consideration when Buying Investment Property. These are essential to be considered for as they can be the sole determinant as to whether you have bought into a bad deal or not.
Buying Investment Properties Expenses:
- Council and Water Rates
- Body Corporate Fees
- Legal Fees
- Building and Pest Inspections
- Stamp Duty
There are plenty more factors you can add to the list, and as you get more experienced, you will formulate your list of elements to take into account for any investment. The record does go on, and if you are like most investors and you have borrowed to buy an investment property, you will have interest payments to make to the bank. Just remember as well that it sometimes a requirement to fork out on rent received and you will almost certainly have to pay capital gains tax should you decide to sell the property. It is of course unless you learn the creative methods of working around this.
Therefore it is evident that buying investment property is a constant source of expense, and while it works, it is not ideal for everyone. Therefore it is essential to do your due diligence and research to ensure you don’t make significant mistakes.
Common Mistakes Made In Buying Investment Property:
- Underestimating contingencies
- Not accounting for any error factors
- Not doing your homework on a property
- you have to do just for the sake of doing it
It is a consensus by the general population that buying investment property will make you productive. However, it is essential that you learn quickly that this is NOT the case. Purchasing investment property will not make you productive, but doing something with it will.
Here are three essential tips to follow when buying investment property:
- Write down your goals. It’s simple if you do not write it down it will not happen. It is stepping one of the processes. Without setting a goal, you will be entering the market blindly, without a real idea of what you want to achieve. The action of writing it down tells your subconscious mind what to produce and does not make it an option but merely a reality.
- Ensure you build a team. The old saying goes that TEAM stands for Together Everyone Achieves More. It is one hundred percent true. Use your side to help guide you to success. Without a team of professionals, you will become overwhelmed and make costly mistakes.
- Gain a mentor. Why not just follow the footsteps of someone successful? Having A mentor can help you speed up your wealth quicker than anything else can and even help you to avoid some mistakes. A mentor builds your knowledge, improves your confidence and can save you years of costly mistakes.
Great properties are selling every day that you may or may not be grasping on to! So get out there, write your goals down. Ensure you build a specialized team and follow the footsteps of your mentor. Following these steps will ensure you are well on the road to buying investment property.