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Property Investment: 7 Key Foundations To Guide New Investors To The Top

Real estate is undoubtedly one of the more attractive forms of investment. Not only is it one that offers potentially huge profits, but it also provides a flexible approach to investing too. As appealing as it might sound, though, anyone looking to enter this competitive arena must do so with their eyes wide open. Otherwise, you could be setting yourself up for a nasty outcome.

Succeeding in the property market isn’t just about buying one and hoping it will increase in value. There are many contributing factors that must be understood, especially by a first-time investor. Embrace these seven tips, though, and you’ll no longer need luck on your side.

#1. There Are No 100% Guarantees

The main selling point of the real estate market is that it offers great stability. The demand for properties ensures that prices will generally continue to rise over the years. However, this should not be an excuse to act in an irresponsible manner. Despite the solid foundations, many investors still lose out in this field.

As a new investor, there’s a good chance that you will encounter a process of trial and error. Still, this guide to protecting your capital should minimize the risks involved. Aside from the direct financial benefits, it provides reassurances that can enable you to achieve far greater things.

#2. You Must Walk Before You Run

Maximizing your financial status is the chief incentive for getting involved in this type of investment. As such, there is a huge temptation to jump straight into the deep end in a bid to gain the biggest return. However, the allures of international investments and other risky moves should be resisted.

Even if you decide to play a backseat role in your future investments, you’ll no doubt want to keep a close eye on things here. Sticking to domestic investments will make it easier to maintain control. Moreover, it removes the stress of adding currency exchange rates and other external matters to the challenge.

#3. New Investors Are Blessed With Great Opportunities

Real estate has been a wonderful investment playground for many years. Then again, the modern investor is now blessed with arguably even greater opportunities than at any other time in this century. And it all boils down to the affordable housing schemes that have been rolled out across various territories in a bid to repair economic growth.

The hopes of buying homes without wasting vast sums on various fees are better than ever. This guide to buying newly launched property project homes will offer great insight. If it reduces the risk and the initial outlay, your hopes of immediate and long-term profits become greater than ever. Frankly, that’s all that any investor could ever ask for.

#4. It’s Not You Versus The World

It might be your capital that is at risk, but that doesn’t mean you have to face this daunting arena alone. Paying for external support may sometimes feel like an added expense. In reality, the professional touch can often make all the difference. After all, the last thing you want to do is make an inexperienced error that comes back to haunt you for years. Sadly, it could take years to repair that damage.

Help is available regardless of which route you take. However, you should aim to embrace expert surveyors and other professionals when buying a fixer-upper. Underestimating the severity of structural damage and other repair costs could see you run out of capital too soon. If the property isn’t properly restored, your chances of selling it on quickly at a profit will remain slim. Finally, if you have a friend or relative with experience in the field, ask for support.

#5. Buying To Sell Isn’t The Only Option  

Making yourself aware of the different avenues is crucial for all investment types. But it’s particularly pertinent in the real estate market. There’s more than one way to skin a cat, and the method that brings you the best return on investment should be your priority. Otherwise, you might as well leave your savings in a bank account.

In today’s climate, that could mean embracing a buy to let scheme. This option can require less capital, and offers long-term revenue. Being a landlord isn’t always easy, though, especially if you encounter a bad tenant. Nonetheless, this is certainly an option that most new investors should consider as a potential solution.

#6. Location Is Everything

As already mentioned, you want to operate (at least early on) on the domestic scene. However, geographic elements shouldn’t end with the country. In truth, it’s equally vital that any purchased property is situated in a winning neighborhood too. After all, it might be an investment for you, but it will become a home to the tenant or future buyer.

There are many factors to consider when searching for a location. From transport links to crime rates, every aspect will influence the attraction of the property to families. This guide to researching the local vicinity before committing to a purchase should set you on the right pathway. Find the right property in the right location, and your career in real estate investment should get off to a flyer.

#7. Calculation Is Essential 

This is a huge step for any investor, new or not, which is why it deserves your full attention. Planning is vital, and you need to know exactly where you stand. Understanding tax relief and other factors is one thing. However, you should also think about the potential rewards offered by a property. For a buy-to-let, you want to consider the 1% rule. When buying to sell, you need to know exactly how much you can realistically earn too. And that includes factoring in marketing and other fees.

Investing in real estate isn’t a hobby. It’s a secondary career, and it’s only worth your time if it will provide financial rewards. While you can’t predict the future, you can make forecasts about how hard your capital will work. Without preparation, you’re asking to fail.

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The Ins & Outs Of Property Investment

 

If you have any money invested in property, or you are planning to, then it really pays to know as much as you can. The more you understand about the entire process, the more likely it is that you will get more out of it. Yet, it can often be difficult figuring out all the gritty details, not to mention the fact that this is the kind of thing which changes with time. In this article, we are going to attempt to make the whole process as easy as possible. If you are in need of some information, then you should be able to find the basics here. This should hopefully help you to make better decisions surrounding your investments in the future, and hopefully get more out of them. Let’s take a look at some of the ins and outs of property investment.

The Importance Of Timing

One of the essential elements when it comes to investing in anything at all is the timing of that investment. This relates both to the timing of the sale and the purchase. Obviously, your main goal in investment is to make as much money as possible from it. This is why you need to pay attention to the markets as closely as you can. It is only by paying attention to the markets that you can properly determine what the best time to buy and sell is. And finding the best time to buy and sell is the best way of ensuring that you get the most that you can from your investment. With that in mind, it is a good idea to begin paying close attention to the relevant markets as soon as possible. The longer you watch them for, the more likely it is that you will be able to get as much as possible out of them.

Choosing The Location

You have no doubt heard of the old saying in real estate – location, location, location. This is meant to illustrate just how important it is that you find the right location for your properties. There are many reasons why choosing a location is centrally important to your investments. One of the main reasons is that the location happens to have a profound impact on the actual value and quality of the investments. This is because many people want to be as central as possible, or to be in certain areas. Of course, you should also think about your proximity to the property you are investing in. You don’t want to be too far away, as you might need to carry out work on the building at any point. However, that doesn’t mean that you have to stick to the strictly local area. You can really invest in property anywhere, and one of the main things to always bear in mind is cost – so if going elsewhere is likely to be better financially, then that might be the best option.

Work On Current Investments First

It is often tempting to go out and get hold of new properties as quickly as you can. However, the truth is that this is unlikely to be the best way to go about doing it. It is often much more effective to work on any current investments you might have first of all. Get those investments to a point where you are making as much from them as possible, and then you can start to look at bringing in other investments as well. This is for a number of reasons, but mostly it is just a matter of financial stability and safety. As long as you have one solid investment, it doesn’t matter quite as much if your subsequent ones don’t work out quite as well. You will always have you initial ones to fall back on. Of course, there are many ways of ensuring that you are making the most of your current properties. One of the most effective is to renovate it, even if it is just one room. You could renovate the main bedroom, for example, or the bathroom. These two renovations in particular are likely to make a considerable difference to the value of the house. Once you have made your current properties as valuable as possible, you can start to shop around for new investments.

Reduce Tax

We all know how important it is to pay tax, and nobody here is suggesting that you shouldn’t do it, but there are ways of ensuring that you don’t have to pay as much. Paying less tax, it goes without saying, means that you are widening your profit margins – and that is really what you are going for. As long as what you are doing is legal, there is no reason not to do whatever you need to to pay less tax. One particularly powerful and popular method is to use a 1031 exchange properties service. Using this service, you can exchange your property for a similar one with higher value, and save on the tax in the process. This can be an extremely lucrative way of making more money out of your property investments.

Decrease Vacancy

Of course, it goes without saying that you probably want to keep a tenant in your property in order to help with the mortgage payments and so on. Buy-to-let is extremely popular, and it is easy to see why. Essentially, you let the tenant pay the mortgage off in the form of rent – and then earn anything above the mortgage cost for yourself. However, there are always going to be costs associated with this process, and it makes sense to want to keep those down as low as possible. To do that, it might be a good idea to decrease vacancy by having one long-term tenant rather than a succession of short-term tenants. That way, you will have to pay much less on administration costs and the like. This is worth bearing in mind if you are considering buy-to-let.