Have you been thinking about getting into real estate investing recently? While this can be a very lucrative endeavor, it’s important that you learn as much as you can about it to steer clear of some traps that come with the job. Here are some useful pieces of advice that will help any first-time property investor.
Come up with goals for the investment
For starters, it’s a good idea to list your goals. What do you want to achieve with this? Is your goal to flip one property, get enough money, and buy your forever home? Do you want to do flipping in the long run? Are you not interested in flipping at all and want to own several properties you can rent out to people both short- and long-term? Decide why you’re doing this so that you know how to reach your objectives.
Set a budget for yourself
Once you know what you want to achieve, it should be easier for you to set a budget for yourself. For one, look into the loans you can get from banks and other lenders, as chances are you will not be able to afford everything in cash, even if you’ve been saving up for ages. With that in mind, it’s vital that you understand how high your repayment rates will be and what kind of interest rates you’re facing. Additionally, you need to know how much money to set aside for renovations and decorations as well as various other fees that come with ownership and flipping.
Research what to buy and where
The next step should be doing proper research into what you want to buy. Are you looking at Mahogany Bay real estate that you can rent out as well? Do you want a house that you will flip and sell for a higher price? Or, do you want one you will rent in order to have a steady income? Is an apartment or a whole building a better alternative for you? Moreover, where do you want this property to be located? Are you interested in a bustling metropolis such as Sydney? In that case, you should look for a trustworthy buyers agent in Sydney that understands the local market and has useful knowledge that can influence your further decisions.
Don’t make it personal
One important thing you need to keep in mind, regardless of whether you will flip or rent, is that you need to think with your head and not your heart. Investors often personalize the property according to their taste, which is not always what is popular on the market. As you will not be living there, you need to research the current trends and what the potential buyers/renters would find appealing.
Decide how the property will be managed
If you’re thinking about renting the property you purchase, you also have to decide who will be managing it. For instance, will you have the time to do regular maintenance, check up on your tenants, and fulfill various other obligations? If not, you might have to turn to a company that offers these kinds of services. Fortunately, these are not difficult to find in bigger cities like Sydney.
Understand your legal and tax obligations
Finally, it’s crucial that you understand all legal and tax obligations that come with property investment. It’s always recommended to turn to a lawyer in the field who will be able to advise you on the moves you have to make. For example, there are responsibilities you have to meet as a landlord as well as taxes that you have to pay. On the other hand, you might be eligible for some tax deductions too, which is something you should discuss with your attorney or consultant.
Investing in real estate can be a great move if you play your cards right. With that in mind, remember these six tips when entering the market.