If you are thinking of investing in property and you are new to the world of real estate investments then there is a lot of thinking to be done before you take the plunge. It’s more than worth it, as real estate is one of those investments that tends to hold onto or increase in value at a much higher rate than cash funds. Before you invest, here is a list of considerations to make:
1.) What is the purpose of my investment
The reason you are investing will dramatically affect the type of property that best suits the purpose. There are many ways to profit from property, you can invest, remodel and sell, invest and sell, invest and rent or invest and renovate into something different. Each option you have for the investment will dictate what you are looking for, and so it is important to decide this ahead of time rather than simply looking for a “good deal”.
2.) How much spare funds do I have
Whatever the type of real estate you choose to invest you, one thing is for sure: it will need some level of work or modification. In order to assess what is a good buy for you, you will need to have a clear understanding before you leap as to what level of funding you are prepared to invest in making the property into something that is profitable.
3.) Do I have the contacts I need?
To profit from real estate you need to make modifications and so nothing will be more helpful to you than a builder, engineer, and architect who will be able to advise you on how healthy a property is, and also how much investment you are likely to have to make should you want to renovate, refurbish or let the property.
4.) Am I ready?
If you investing in real estate than you are about to take on a level of responsibility, both financial and business wise and so you must be prepared for the time and money that this new venture will require of you. Investing in real estate is like taking a part time job, and you will need to be available to deal with problems, fix issues and trouble shoot before you start the process, so if you do not have the time now, make some! You will need it later!
5.) Am I comfortable with the decision I am making?
Its very important to be comfortable with the decision you are making when it comes to investing in real estate, as this investment is going to be a key part of your life for a period of time. Speaking to sales people can be dazzling and you may find yourself becoming convinced to go ahead with something that you are no altogether comfortable with because it has been sold well. Instead of going along with what you are being advised, listen to your gut and feel free to back down from something that doesn’t feel right. Better to be enthusiastic about your investment than worried.
Ben is a property expert and writes for Livingroom, Guernsey’s leading estate agent.