Anything you spend money on can be viewed as an investment. Your daily costs are an investment in your life. Your gym membership is an investment in your health. These are all small compared to making any other investment that can cost you thousands of euros.
The higher the cost, the higher the responsibility for you to research and learn as much as possible to ensure you make the right decision. Real estate investing can yield great rewards, but only if done right.
The key to making the right decision is to ensure you know what to look into before investing in a property. Everything we’ll discuss in this blog post will guide you through the delicate landscape of real estate, helping you make informed and profitable decisions.
Your journey into real estate investing begins with deciding how much you will invest. The size of your investment depends on your budget. If your budget is too low, you might be unable to invest in something lucrative. Also, the budget has to be big enough to cover closing costs, renovations, and potential contingencies.
On the other hand, you might have to secure a certain amount in the form of financing. You should also consider mortgages, loans, partnerships or any other financial plan to create a solid financial ground.
The potential for a satisfactory return on the investment is based on the location potential. You need to do your research and look into potential locations. Then, you must decide whether you want to invest in an urban or suburban property. Consider the area and availability of facilities like schools, supermarkets, hospitals, sports centres, etc., that will influence your rental income. Analyse the location and the market to estimate its potential for future growth.
You must be informed before making any investment or any decision regarding the potential investment. Staying in touch with current market trends will guide you to make a fully informed decision. Talk to real estate agents or agencies, find other people already investing in real estate, and join a networking event to learn more about the market and the industry.
Every type of property comes with its pros and cons and hidden challenges. An apartment and a house are not the same, and possible renovation costs might differ. Another set of challenges comes with deciding between residential properties, commercial spaces, and industrial properties. The class of property you decide to invest in will determine the success of your investment. You need to define your investment goals and what type of risk you’re willing to tolerate to know which type of property will align with your goals.
At some point, you will enter the market and find several prospects. These properties must be thoroughly inspected before you even consider purchasing them. The key to maintaining financial stability throughout your investment is to find a professional who will determine the cost of your construction or renovation project.
For example, if you’re looking to invest in a property in Australia, you should find quantity surveyor Gold Coast or anywhere else to determine cost-saving opportunities and help you with budget-friendly renovation or construction decisions.
Before you enter into a renovation project with your new investment property, you need to define your goals. Before making any investment, you need to set your expectations and your goals. Whether you’re seeking rental income, real estate appreciation, or both, you need to know your goals. This will further influence your decisions about the type of property, location and the market.
Everything in life comes with a risk, and the risks are even higher when money is involved. Money is something that can lose its value if it's not invested properly. So, how much risk is comfortable for you? If this is your first purchase, get informed about the risks. If you’re already familiar with the property investment industry, get to know the risks of a certain property type or the market. Make sure to include strategies for risk mitigation like professional property management or insurance.
Real estate is defined by rules, regulations, zoning regulations, building permits and so on. Thus, before you enter your chosen market, you need to be fully aware of the zoning requirements and required permits. All of these take time, so securing a building permit also has to be included in your budget, as it can affect the time needed for your investment to start churning the profit. The best way to understand these complexities and understand the legal framework is to consult with a real estate attorney
In addition to these eight things, you need to be aware of the taxes associated with your investment. You might be eligible for deductions or exemptions, so get to know your tax situation. Lastly, consider having an exit strategy, just in case the investment does not bring the projected return on investment.
