If you have been thinking about investing in property for a long time, then, you are not alone. Real estates are the national past-time, and yet, when it comes to investing in property, most of the people get overwhelmed by the process and quit. In this case, the phrase “With too much knowledge, comes sorrow and grief”. Property Investment is a topic that everyone has been talking about all over the Internet, and therefore, this vast knowledge is confusing the newbies. Some of the newbies even end up enrolling in mentoring programs under big name gurus, which overwhelms them more. But, to be very honest, property investment is pretty straight-forward. Catching the mainstream property investment tips is all you need to start investing.
Okay, before going in to the tips, that you need to start your investment career, let’s just see what your strategy should be in case you are just starting out. There are just two different types of real estate investors generally. One is the passive investor and the another is the active investor. A passive investor is somebody who generally invests in a long-term hold. They invest just to be in the game. They don’t want to go out, get in the field, judge a property by its value etc. They don’t even actually care about seeing other better deals or renegotiate. They just buy the property and hold to them. On the contrary, the active buyers are someone, who is actively in the process. They judge the deal, they negotiate and then renegotiate, if there are repairs to be done with the property, they also do the repairs and sell the house within a span of a year, one way or the other. Now, the questions stay, as a newbie, what type of an investor should you be? Both of them has its pros and cons. You should be whatever suits you. You can be both of them at a time too.
Now, to help you begin your venture in to the world of property investment, here are eight steps that you can follow to get started with Property investment.
Check Your Finances
Checking your finances before starting out on investing in property is something that every newbie should do. Jot down your assets, which should include your incomes, and then work out the expenses. You should get a clear idea about how much cash you have to invest. If you know how much cash you have to invest, then it would be easier for you to hunt down properties based on your cash limit.
Don’t get discouraged if you have not got enough cash to invest just now. If you have got a good paying job with a good employment history, you might also apply for a loan and then invest in a property while paying out your loans every month in simple EMI’s.
Get a Pre-Approval
You can also apply for a pre-approval directly, either through your lender or through your mortgage broker. It would be more beneficial if you go for a pre-approval through your broker, if in case you are not sure about your financial capability.
Applying for a pre-approval is good, but similarly, applying for multiple pre-approvals is not considered as good in market terms. Since, every time you apply for one, the lender will check your credit history and might black list or red flag you, hence, denying your application.
Set Your Goals
In property investment, it is really necessary to set your goals up. Some people, or most of the people who invests in property mainly does so, so that they can be financially independent in future. Importantly, set a timeline, on when you want to achieve these things. Then, divide the timeline in small enough processes so that you don’t get overwhelmed by the enormity of the task that you need to do.
Attitude to Risk
It is very important to know your attitude to risk. It just goes on to mean that, how much risk can you tolerate. Whilst creating strategies for your investment, it is really important to know the attitude to risk.
Well, budgeting isn’t sexy, but you got to do it to survive the cruel world of property investment. Budgeting is the only way that will let you balance between the expenditures and the savings. It allows you to realize your money flow, and helps you to plan for bigger expenses that you have lined up for your future. Therefore, even before you get in to the game of investment, budget!
A Purchase Plan
Create a purchase plan, that meets your long term as well as short term goals. As far as your purchase plan is bringing you the growth and income you have been aiming for, you are good.
Make a decision, but always an informed one. Do not make a decision based on your hunches. There are many tools available out there online, which you can use to know the market and then make the right choices for investment.
When you are informed, you are also wary of property peddlers and quick rich schemes. When someone guarantees you guaranteed return or overnight riches, the only thing you should do is slap them and walk away. Since, the only person who will be getting rich are those who would be tricking you.
In the investment business, no one is an expert. Yes, there are tried and researched methods of investing in a property, which work, but there is no assurance that following those will give you the best results. Therefore, you need to have a tolerance for risk, both long term and short term.
Stay focused. Period. If you have invested in a property, or if you are going to invest in a property, think about it as a business decision, and not as an emotional reaction. Be clear about your milestones, timelines and you would be good.
Don’t give up. It is pretty easy to get overwhelmed at first, since you are a newbie, but once you get a hold of it, it will be smooth. Just imagine, down the line, after ten years, if you select the right properties now, you would be sitting back, feeling happy and secure about the decisions you made before ten years.
How satisfying is that?