There is a lot of information and advice available for those who wish to learn about property investing. However, due to the world’s current climate, a lot of people are wondering what will happen to property investing this year and in 2021. The good thing about properties is that they don’t depreciate so that you will get your money’s worth.
If you wish to know more about property investing, you can check for tips online, or you can reach out to the team at Bugis Credit to guide you. In uncertain times, you will need solid advice and bulletproof tips. Here are the ten things you should know about property investing.
Plan it out
When you decide to invest in a property, the first important step that you need to make is to plan everything out down to the smallest details. Find a strategy that fits your goals, your ideal time frame, and your risk profile. Stay away from schemes that promise you of getting rich fast, the best way to go is slow and steady.
Purchase and hold
Purchasing and holding involve putting up leverages, especially time and equity. This means the acquisition phase should be held for a long time so that your capital gains will grow, and you will have extra equity ready for your next investment. Once you have created an asset base, you switch into the next stage of your investment, cash flow.
Purchase and renovate
This is the same as buying and holding. Still, the only difference is that you can manufacture your capital growth, and you can also expedite the growth of your investment portfolio.
This stage can be achieved by getting “fixer-uppers” in different locations like the best street in the neighborhood, the worst apartment, the worst house, and the suburb’s best property. You can then undertake some improvements to help increase your capital and your rental value.
Create a peer network
It is essential, especially if you are a beginner, to surround yourself with professionals who have the experience and can guide you in your investment journey. And even though you need a solicitor, a property accountant, a property strategist, a finance broker, and a mentor, it is just as crucial that you talk to people who are like-minded and who are also investing in properties.
Networking is not as complicated as it may seem, there are many social media platforms, blogs, and forums that you can join that have extensive explanation and threads on how to create networking for real estate.
In many instances, property investors are more than willing to talk to beginners online and share their experiences, mistakes, journey, and how they found success in the field. Many of these mentors have Google Plus accounts, Facebook accounts, and LinkedIn accounts that make it easier for you to reach out to them.
Shows, seminars, audiobooks, and presentations can also be another way to listen to experienced professionals who can help you track what you are doing.
Check the numbers
You must have a good footing when it comes to financing, especially if it is your first time investing. After you review the numbers based on the resent interest rates, consider at least 2% points of upward adjustments and recheck the numbers.
Due to the economy’s current situation, the interest rates are meager, and it has encouraged a lot of beginners to start their investment journey. But the mistake here is not calculating their numbers and thinking if they can hold onto the assets in the future when the interest rates spike up. It may take time to happen, but it will go up again in the future.
Think about your target market
Investing in a property is still considered as a business, which is why you must review your demographic and check your target market. Even though you have tenants that will pay rent, owners are the main cash cow of the market, and they determine the overall value of your property.
When buying a property, you need to be aware of the homebuyers and the tenants. Then, you need to select the right properties for both groups so that you can enjoy your capital gains in the long-term. For example, buying an apartment with one bedroom in the suburbs, where most of the residents are growing families, is not a smart move.
Know about the negotiation process
You must have the knowledge when it comes to negotiating, and it is more than just coming up with the final price of the property. Negotiation also includes reviewing the terms of the contract and knowing more about your buyer.
When it comes to properties, everything can be negotiated, not just the price, but also the contract terms, the settlement, the deposit, and more. Even though everything is negotiable, do not get carried away and complicate the process because you might lose your potential buyer.
Use your tax perks
You can invest for capital growth but remember that cash flow is essential when it comes to the portfolio of property investments. Not being able to maintain an excellent bottom line means that you are putting your real asset at risk.
One of the ways that you can maximize your investment cash flow is by using income tax incentives that are given to real estate investors. You can talk to your accountant about it to ensure that you can use your tax deductions and the depreciation allowances.
Do not make the investment personal.
Although properties have a special place in our memories, it is best to look at it from a financial perspective and not be emotional. You must keep your heart out of the equation, or else you won’t be able to think straight.
Property investment is not about your taste; it is about appealing to your target market. You need to see the properties as a commodity for your demographic, and you need to know the profit and revenue if you begin your investment journey. It is all about numbers.