How to Start Your Real Estate Investment Journey
One of the most lucrative investment opportunities is within real estate, especially in countries such as the UK, Australia, the United States and Canada. Where local wages are high, returns are continually growing and return on investment in the renovations market are exponential, you might be looking to kick start your real estate investment journey come 2022.
With that being said, we have some tips to help you get into the real estate investment world and reduce your chances of losing too much money. It’s always important to be wise about your investments, do your research and to never act on impulse.
Take a look at how to start your real estate journey below.
Understand Which Financial Stage You’re In
When we look online and read stories about property investors giving their insights and tips, they often forget one big point and that’s where to start off financially.
It is imperative to keep in mind that property and real estate investment isn’t some easy way out of debt, for example, and you will always want to make certain you’re in good financial standing before you kick things off.
You want to make sure that you’re solid with regards to your current finances and are beyond your survival and stability stages and well on your way to growth and income stages before you deep dive into real estate.
Banks and lenders will want to see that not only are you a stable income earner, but you have the ability to invest and pay off your loans. You can click here to calculate paying off various loan sizes to give yourself a better insight into what you can afford.
Determine an Investment Strategy
As you might already know nothing happens in the real estate world without a solid plan, and so working on your strategy is a good place to start.
There is the chance that you might want to write up a ton of information on your strategy, though it’s best to keep things simple for now and just get started. There are a few different investment strategies to consider and these are the growth strategy, the income strategy and the saver or stability strategy.
Let’s break these down for you.
For this strategy, it is likely that you’re focused more heavily on making money in the market and looking to flip or re-sell the property in a shorter period of time to make a large profit.
In this strategy, you would be looking to invest in a property, and work to flatline your expenses for this property in order to use the income earned to simply save money. You could even do this whilst living in the property, or having renters, for example.
When it comes to income, this strategy is essentially your way to turn your property into an active money-maker which essentially provides you with a large or small steady income by which you don’t need to do too much to keep this income flowing.
With those three strategies out of the way, you can determine which side you’re more likely to follow and whether it’s worth deep-diving one or the other.
Choosing a Realistic Market
Arguably one of the most important factors in real estate investment is deeply researching as many local housing markets as possible.
You’re going to want the location you choose to align with your investment strategy and this means looking for a home in a location where you’ll see either high value growth, high demand for renters or a steady and unlikely risk of value collapse.
You can rely on agents for some of this research given that they are likely to have the resources and local knowledge of what and where to look to find properties that match your priorities.
Line Up Financing
When it’s time to pull the trigger on a new investment property, you’ll want to make sure you’re getting the lowest rates possible and choosing a loan that is flexible enough for your liking.
You can work with mortgage brokers here, or go out on your own. Be sure to do plenty of research on the loan rates offered but also the predictions of rate rises and falls. You don’t want to commit to a variable rate that could see you paying through the nose for your loan.
When it comes to investing in property, it’s always best to have a solid plan in place and work with a strategy in mind, as opposed to simply looking to make a profit.
With some form of guide to follow, you’ll be better able to make long-term decisions and more easily work to reach your end goal given that you have it outlined and have made sure it’s easy to understand.