Thinking of investing in property but don’t know how to start? Check out these tips when buying your first investment property:
- Know what you’re getting into
- Look at all your options
- Research the area you’re investing in
- Figure out how to finance your purchase
- Calculate other expenses and potential profit
- Get a real estate agent
Before diving into the world of investment real estate, take the time to understand the industry you’re getting into. Each type of investment property comes with its own advantages and disadvantages. Selling property for profit can give you quicker gains but you have to deal with renovation and remodeling issues. A rental property, meanwhile, provides a steadier source of income but you have to manage the tenants and do regular maintenance.
PRO TIP: Have a set of financial goals in mind before you start investing. This will help determine the kind of investment property is best for you.
Get a better understanding of the local real estate market by exploring what’s available to you. Thanks to the internet, you can easily look at a hundred properties simultaneously without breaking into a sweat. Analyzing these properties may take more time due to the sheer volume of properties to sift through but it’s worth the effort.
PRO TIP: Take your time. First-time investors can get too excited to get started that they snatch the first property they come across and end up overpaying for it. Be patient – wait for the one that will help you achieve your financial goals.
Location is an important aspect of all types of real estate that realtors usually say it thrice. This is because a property’s location can often make or break your investment. Thus, it’s not enough to just know about the amenities a property offers. Look at the area it’s in.
PRO TIP: Talk to residents or read local news sites for a better gauge of the area. Also, watch out for any future developments in the neighborhood that could affect your investment.
Investment properties are known to have higher down payment costs and
interest rates than residential properties. To figure out the best way on how to
allot your finances into investment properties, discuss this with a real estate
PRO TIP: Shop around for the best mortgage deal. Check out different banks and lenders to see what they can offer. It’s also advisable that you pay off your incurred debts before investing for lesser hassles in accounting.
Always take into account hidden expenses such as council rates, insurance, property management costs, and taxes. First-time investors who neglect this could risk barely breaking even or losing money altogether.
PRO TIP: Do a cash flow analysis on the potential property. The analysis gives regard to all expenses and potential income so you can avoid any
There is a certain procedure to follow, as well as challenges to meet when dealing with investment property. Google and instructional videos can only teach you so much. But in hiring a real estate agent, you have an expert who can answer all your questions and give advice on the property and location. An agent uses numerous tools to analyze the real estate market and investment properties. This analysis helps in finding the perfect investment for you.
PRO TIP: Get an agent who has expertise in investment properties and the area you’re looking into. No one knows more about investment opportunities in the Old Bridge, East Brunswick, and Sayreville, NJ areas than our team of experts here at Formula Realty. Give us a call at 732.858.5822 or send an email to mybrokermax(at)gmail(dotted)com.
If you’re looking for investment property for sale in NJ, check out our investmentguide on our website to learn more.