Investing in property is a proven road to long-term wealth, but that doesn’t mean every property investment is lucrative and guaranteed to generate a positive return.
When choosing where to invest, you should consider and understand a few things first.
Understand your ‘why’
Buying a property is generally the biggest financial purchase one will make in their lifetime, so don’t be afraid to take the time to assess your financial situation and understand the decision you’re making.
Are you choosing to invest in property because you want a long-term income stream, or is the decision driven by something else?
Are you comfortable with the property being potentially rented for years?
Is this the best investment option for your circumstances?
These are just some of the questions you need to ask yourself before you start searching for properties.
Follow your brain, not your heart
Okay, so you’ve mentally prepared yourself to invest in a property - great!
You might start searching for properties online and find yourself bookmarking beautifully decorated, newly-launched property showhomes that are “perfect” for you - stop yourself and read my link below.
An investment property is just that - an investment. You’re looking for a house with potential to generate income for you, not a place for you to call home.
Just because you might decide to rent out the property at some point, doesn’t mean it needs to have all the frills and more.
A decent house with a working kitchen and plumbing will do the trick just fine. - not property showrooms that don't reflect reality!
Know your target tenants
If you’re looking to earn rental yield from your investment property, knowing your target tenants is crucial.
Understand the area and your target tenants before you begin deciding what type of property you want to buy.
Look for somewhere familiar
Where you invest affects so many aspects of an investment, but we’re not saying only invest in your own neighbourhood.
Rather, we’re encouraging you to do your research on the area of your potential investment so you know it as well as your own backyard.
You can never do too much research - understand everything from demographics and tenant profiles to past market performance and location history.
Consider the maintenance of the property
Unfortunately, unlike other investment options, property does involve a fair bit of physical maintenance.
Thankfully if you do your research, you can pick a property that doesn’t involve as much maintenance as others.
For example properties with tiles or parquet floors need minimal upkeep and cleaning. Landscaping can be a very expensive option when considering landed properties.
Maintenance can’t be avoided, so you need to factor this into your investment financials.
I have outlined some key points to consider when you’re choosing where to invest, however you can always do more due diligence before committing to an investment!
PS—Remember, none of my emails and blogs should be used as personal advice!
Everyone’s personal situation is different, so I recommend to always seek A MENTOR with REAL experience to guide you along.
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This post is great. Thank you for this post. I like this type of people who share knowledge with others.
Eamon Lowe