Thursday, 9 June 2016

How to: Start Investing in Real Estate

Real estate investment is a strategy where an investor purchases a property in order to protect and grow his wealth. The investor can either rent out the property or live in it only to resell it at a higher cost than it was purchased for. But how do you get started with the investment plan? Here are a few helpful steps:

1. Set your goals

Think about why you want to purchase property and what you are looking to achieve. Having clarity about your end goal will reduce confusion and worries. The most important thing is setting a deadline as to when you want to achieve your goals.

2. Check your finances

List out all the assets and sources of money you have. This will help you get an idea of how much money you have available to invest. As long as you have a stable and well-paying job, there should not be any issue while getting a loan.

Also, consider investing in mutual funds, stock market, etc. to increase your money.

3. Get a pre-approval

Get a pre-approval for your loan amount directly through your lender or through your trusted mortgage agent. Taking advice from a broker before applying for a pre-approval can be advantageous if you’re unsure about starting a real estate investment or your borrowing capacity.

4. Start budgeting

Budgeting is a way to make sure you’re able to adjust your income and expenses well. Note down what your monthly income is and cut all the required expenditures from it. This will give you an idea of how much money is being spent. Then decide where you can cut down your expenditure. This will help you plan for bigger expenses down the line.

5. Be aware of your attitude towards risk

Know your own emotions and attitude towards risk. This will help you create a great purchasing strategy. By gauging your tolerance for risk, you will know how much you’re willing to take on over the shorter and longer term.

6. Research

Thoroughly research the market before making any purchase commitments - this helps you make better choices. Research is done to confirm the pricing of an area, the projected rental income, property appreciation rate, tenant demand, future development and more.

7. Stay Focussed

Always stick to your budget and price range. Be clear about your goal, when you want to achieve it and identify milestones to get to your goal. Don't get carried away by others' opinions. You should use your head instead of your heart while investing in a property.

No comments:

Post a Comment