Considering financial investments, accumulating wealth, and depositing “retirement capital” for themselves, many people will consider investing in real estate, and real estate investment is still considered one of the safest long-term investments. Investing in real estate is indeed a good way to create wealth. What specific preparations do you need to do?
Some people buy real estate and want to rent directly to rent, and some people want to renovate themselves. No matter which one, there are some “golden rules” you need to think about yourself before buying a house. Buying a home network summarizes the “golden rules” that you need to consider before investing in 10 real estate properties to help you prepare fully before entering the market.
1. Know your budget
Before investing in real estate, the most important thing is to thoroughly understand your cash flow. In addition, you can apply to the bank for a pre-audit of your investment loan, so that you can clearly understand the amount you can borrow before you start to buy a home.
2. Do not underestimate the follow-up cost of buying a house
Don’t use up all your budget at the time of buying a house. A surplus is required when buying a home to ensure that there is sufficient budget to cover taxes, insurance, and some basic maintenance costs. Of course, when you buy a house, you should also carefully review the condition of the internal facilities of the property. After purchasing the ideal investment property, try to avoid expensive maintenance problems, such as replacing aging taps.
3. Buying in an area with growth potential
Try to buy a house in an area where renting demand is strong. Convenient and close to the school’s property is more attractive to tenants.
4. Your investment objectives must be realistic
Ask yourself before investing, do you want to invest in a property that can quickly add value in the short term, or do you want to own a property for a long time? When the property market is in good condition, you can quickly renovate your home after purchasing the property, so you can easily earn a return on your investment. However, in a period of slow economic development, it may take many years to achieve the same growth. Therefore, it is important to recognize the overall situation of the housing market and then combine its own investment needs.
In addition, pay attention to those properties located in steep terrain, although it can bring great vision and landscape to the residents, but the cost of excavation and filling the land is not low.
5. Self-sufficiency
Paying a professional renovation team to renovate an investment property can result in high costs. If you have already prepared your DIY, you can save a lot of money in the decoration and increase the profit margin of real estate investment.
6. Choose livable, not luxurious
If you are considering renting a house immediately after renting it, you need to be aware that neat and practical properties are most popular with tenants. When you buy a house, the stylish and luxurious decoration style will really make you shine, but remember not to buy it just because you like the interior style of the house.
7. Think rationally, don’t impulsively consume
When people buy a house, they are easily taken away by emotions. For example, people often look at houses on steep slopes because their scenery is often unobstructed and stunning. But when you buy a house that you want to renovate or rebuild, you’ll find that the cost of digging or building a wall can be very high. This example tells us that when buying an investment house, we must rationally think about the pros and cons.
Ten golden rules that must be repaired before investing in real estate
8. Are you prepared for financial negative growth?
If the monthly rent is not able to repay the loan in the investment house, then your property will experience negative growth. Although this situation may save you some taxes, if you do not have enough cash flow to pay for repayment of loans, interest rates or property fees, it will lead to a lot of financial pressure. Therefore, please consider your budget carefully before purchasing.
9. Are you still repaying your mortgage?
If you are still repaying your home for the house you live in, you need to assess your liability and ensure that the liability is affordable before purchasing a new investment property. If the mortgage of your own house has been repaid over half of the time, and other debts (such as credit cards, etc.) are still under control, then it is an ideal time for you to invest in real estate.
10. Conducting a building inspection
Finally, when you have selected your favorite property, please take some time to understand the building inspection report before signing the purchase contract, which will help you avoid expensive repairs. At the same time, termites are a potential problem worth noting.