Essential Rules of Investing in Property
With the market in its current state there has never been a more important time to get investing in property exactly right. Get it wrong at the moment and you could lose a fortune. Get it right and you could be one of the few people to make money out of a recession. That’s why if you are thinking about getting into property investment it is a good time to sort out some rules as to how to proceed:
Firstly, make sure you take some time for yourself to do a lot of research about the area you are considering purchasing property in. Learn about the people who live there, the businesses that are based there and any other important buildings and services that are part of the local community. How is the transport to and from the area? What are the amenities like?
If you draw up an overview of the people who live there, you will begin to get an idea of potential tenants for the property. Obviously, if you go for locations of quality you are more likely to get tenants of quality too. Next, look at the prices in that area and compare the price of the property you are looking at. Does it compare favourably? If not, why not? How long has it been on the market? Will it need extra outgoings such as repairs, refurbishment or redesign?
Ask yourself if the property is likely to achieve growth and capital appreciation. Will you be able to make money both from rental and from a long term rise in prices? Then consider the potential negatives. Are you prepared to cover your investment if it takes you a while to find tenants? Can you cover your costs and your mortgage while you wait for a few months? And when it comes to capital appreciation you should also be prepared for a long wait. The market is not racing upwards currently as it had been doing for the last ten years and it could be a long time before those kinds of gains return to the market. Instead, simply consider the long term supply and demand of the area and whether there will be a permanent need for the kind of property rental and sale that you are intending on investing in.
Do your research, plan ahead and think carefully and you could have yourself a great investment that will give you both short and long term gains.
James is a business blogger and writer, who writes about everything from business equipment to business technology and from business loans to where to find a good contractor calculator.