Whether you are buying or selling real estate, it is critical that you have the property inspected and that you disclose any issues that are required by law to disclose. For example, you may be legally required to disclose lead, asbestos or other toxins in the home. Failure to do these things can result in fines or other issues. However, it isn't always easy for real estate buyers and sellers to know what they need to do. Hi, my name is Mary. I have been investing in real estate since the week after I left uni. I love it, and I have learned a lot along the way. I want to help and inform others so I decided to make this blog. I hope you find it useful.
Since the global financial crisis in 2008, investing your money by buying property and renting it out to earn a return has become an increasingly popular option. However, making such a large investment isn't something you should do without careful consideration. Below is a guide to things you should think about before investing in property.
Carry Out a Risk Assessment
Even with a mortgage, buying a property requires a large amount of capital. It is therefore vital that you carry out a proper risk assessment before committing to a deal. You should factor in the cost of the long term maintenance of the property and additional cost such as home insurance and any local tax you will be required to pay. You also need to be aware that as a long term investment, unlike traditional investment vehicles such as stocks and shares, your money will be locked in. If you need to access your money which is invested in stocks and shares, you can sell a portion of your investment, however you cannot sell a room of your property if you wish to access the money.
Spread the Risk and Save
Because you money will be locked in, when investing in buying rental property, you should consider spreading the risk. There are two ways you can do this. Firstly, you could split your investment between a rental property and traditional investments such as a managed fund. Secondly, if you already own a property, you could buy a second rental property in a different geographical location. This means that if property prices fall in your city there is a reasonable chance that your rental property will be unaffected and vice-versa.
Once you have invested in a rental property, you should save a proportion of the rental income you receive. This will help you to protect yourself during period when the property is vacant for an extended period or the rent paid is late.
Property Investment Tips
Before purchasing a second property as a rental investment, you should contact a professional real estate agent.Share
23 June 2016