Investing in the real estate market has gained popularity among many investors, due to the relatively safe nature of the investment compared to the ups and downs associated with stocks, the foreign exchange market, or other investment firms. Not everyone has what it takes to make profitable real estate investments, but for those who are looking to invest in the real estate market, it would be wise to take a look at the points mentioned below.
time is of the essence
When making any type of investment, you must have a clear understanding of the time period in which you want to invest your money. Buying a property and then renting it out is one of the most popular and safest real estate investment methods on the market today. If you plan to own the property for longer than that, you must take into account the additional costs that you would have to incur, such as repairs and maintenance. No matter how durable your property is, if you plan to keep it for a longer period of time, such as 15 to 20 years, you will most likely have to make extensive and expensive repairs.
On the other hand, if you plan to keep the property for a short period of time, such as 5 years, you should be careful about the money you spend on repairs and maintenance. 5 years is considered a short period in the real estate market and you are advised not to undertake large scale repairs unless you feel you will be able to recoup your expenses by the time you decide to sell your property.
credit history
To be eligible for a bank loan, you must take care of your credit card debt and pay your utility bills on time. Bank loans are generally required to finance real estate investments due to the large amounts of down payments required to secure property purchases. Keep in mind that banks seem to have tightened up lending recently due to the housing crisis and this factor can be extremely important.
professional advice
Due to the current recession prevailing in the market, there are more sellers than buyers in the real estate market. This can work in your favor as you now have more options to choose from. But it is highly recommended that you hire a professional real estate agent to review the property you wish to buy. A professional real estate agent will be able to better advise you on the real value of the property in today’s market. She will also be able to guide you and tell you about the pros and cons (if any) related to the property, such as the type of neighborhood, security issues, and the property’s proximity to hospitals and schools.
There are many things to consider when buying real estate, but if you get these three right, you’re on your way to seeing some success.