Real estate tips! You’ve probably heard like hundreds of them and yet must be looking for some expert investment property advice. But why does one need real estate investing tips? Won’t your broker tell you all about the property and the money? Definitely, they will but there are numerous facts that one must know before investing in real estate. Like how can you get to know the market better or how can you estimate the rental returns or appreciation rate? So for you, the investor, we have some of the most important tips mentioned below.
The first tip, know your costs! Owning real estate isn’t as easy and pretty as it seems. There are plenty of costs that are involved like annual maintenance charges, utility charges, and taxes. Additionally, if you will be taking a loan; don’t forget to keep in mind the interest rates. Are you ready for such a long-term financial commitment? If you’re opting for a mortgage, be very sure that the payment scheme is lower than your profits will turn out to be.
Second, determine your returns! For every rupee you invest in real estate; what is the ROI you will be earning? Are there other investment options that will accompany higher profits? Or is this the best choice? Well, investments in stock could offer a 7.5% cash-on-cash return, while bonds may yield a 4.5% gain. An ideal number for Returns on real estate would be 6% in the first year which of course gradually increases during the course of the investment.
Third tip would be to choose the right location. The right location would be in close proximity to schools, parks, restaurants, malls, and so on. Not just that but a location with lower property taxes would just be a big win! A location with low crime rates would yet be another property aspect you might want to focus on. And if your goal is to rent out the property; then a real estate investment in the growing job market should be on your priority list.
Forth, Develop a rapport with both: the government officials and the day-to-day service providers. If you are looking to purely make an investment then there certain reliable contacts you will need. Property managers, real estate agents, CPA, money lenders, an attorney have to be on the list along with the contractors, plumbers, , handyman and pest control experts. These will be looking after your property and maintaining them. You would like to be in their good books and ensure they have the best market knowledge.
The fifth and the most important tip is, to pay off your personal debt first. If you have your student loan or unpaid medical expenses; make sure to pay them off first. A debt only looks impressive on an investor’s portfolio but if you are new to this zone; then the debt is a big no-no. Only if you can see guaranteed rental returns being higher than your debt payoff; should you take the chance.
Those were the 5 crucial real estate tips for buyers. So next time when you go house-hunting; do cross-check the property facts with the above tips to make a well-informed decision. Or if you are considering a real estate investment, then check if your property and plans match the above tips.