Choosing your first investment property
Choosing your first investment property is a massive decision for most people who get to it. Like many things, it’s all about trying to minimize your risks while maximizing the potential for making money. No two situations are the same. You are only limited by the amount of capital you can afford to raise and the law. Whether you’re looking at converting an old barn or buying up a couple of city apartments that have yet to be built, here are some guidelines that will help you make your decision.
One of the most basic rules, if you are looking to invest in rental property is to buy near schools or hospitals. Many renters are young families who haven’t yet got enough more to get on the property ladder themselves. These guys often have kids and will be prepared to move to a new property if it is within a good school district. This very fact could also keep them paying rent to you rather than finally getting a mortgage of their own if it means their child can continue to attend the same school. At the other end of the age range, elderly people often rent after selling their homes in order to avoid their loved ones having to pay inheritance tax on their property when they die. They can simply transfer ownership to their next of kin, sell the house off, hand over a lump sum and keep some to live off. These people will want to be close to local shops, cafes, parks and hospitals.
Rather than being interested in making rental income, you might be what’s known as a flipper – someone who buys a run-down property, renovates it and sells it on for a handsome profit. Obviously, the best time for you to buy is when properties are not selling. If you can find an interesting property that has been on the market for a number of years, you may be able to place a cheekily low offer that will be accepted as the owners just want to get the house sold and get on with their lives. Properties like this might not even need much work doing to them at all. If you can afford to keep the house until the market recovers, you’ll make a nice amount anyway. You’ll see people buy and sell the same house for a tidy profit when you see properties come up for auction.
Sometimes the owner of a house wants to sell directly without using an agent. Economists estimate that using an agent to sell your home can cost you up to 10% of its true value. But it’s not necessarily bad news for you. For example, a house owner might undervalue their house simply due to something like a stiff garage door, due to the negative impression it immediately gives. However, you know full well that you can get online and order something like this - http://www.garageautomatics.com/chamberlain-pd220/- for a snip and the negative impression will instantly be replaced by a garage door opener that impresses visitors.
As it’s your first time to buy an investment property, it’s worthwhile trying to meet and talk to other investors to get their tips about what to look out for, potential problems and difficulties and so on. Lone investors have been in your shoes at some point and will usually be happy to help. Try to get a number of different viewpoints before acting on any advice, of course.
If you are worried that the numbers are too tight to be worth your time when looking for an investment property in your area, you may want to look abroad. Look for investment opportunities in places with a high perceived risk, but low actual risk. For example many investors are scared to invest in places like Colombia, which has, until recently, been rocked by a brutal rebel insurgency and paramilitaries engaged in guerrilla warfare, kidnappings and acts of terrorism. In fact, Colombia is much safer now than it has been in a generation, but the perceived risk is still high, and so property prices are low. Ask the actual risk is low, it will gradually become more popular and your property will increase in value as more investors enter the market.http://psychgrad.org/choosing-first-investment-property/http://psychgrad.org/wp-content/uploads/2016/04/Choosing-your-first-investment-property.jpghttp://psychgrad.org/wp-content/uploads/2016/04/Choosing-your-first-investment-property-150x150.jpgPersonal