If you have decided to buy your first investment property, you have made an excellent decision. Purchasing investment property is a smart step towards preparing for the future financially. Access to the right information at the right time provides a competitive purchasing advantage. For this reason, we have put together some tips that will help you do it right. Without wasting any more time, let's cut to the chase!

  • Hire a buyer's advocate or agent: For someone new to real estate investment, it is advisable to get professional help. There may be real estate complexities that would require the assistance of professionals. Not only would an agent or advocate answer your questions, but they would also advise you as to how to achieve your goals.

Also, you would not need to worry about challenging tasks like filing paperwork, as your agent will handle them. The best thing about hiring a buyer's agent is that you don't have to set aside their fees. However, this is not to say that they work for free. A seller's agent is paid a commission, and he is to share it with the buyer's agent upon the completion of the transaction. However, this is only when you, as the buyer, comes to the seller and his agent with your agent. If you are not sure where to find an expert buyer's agent, Pumped On Property Brisbane is an excellent place to start.

  • Study and understand the real estate market: Regardless of when you want to purchase your investment property, you must understand the market at that given time. Living in that particular area is not enough to arm you with the necessary information. It is essential to research the market, particularly if you want to invest in property outside your area. 

You must ensure that the property you wish to purchase is located in a place that would yield the expected returns. This process can be done by carrying on a real estate market analysis. Such an analysis involves studying data, neighborhoods, inventory, interest rates, market needs, and construction costs. Even though it can be time-consuming and strenuous, it will help you make smarter choices. You could also make use of Artificial Intelligence and Predictive Analytics to speed up your research and make it easier.

  • Put your finances in a good condition: Many options are available to you as regards financing your first real estate property. Mortgage loans may be your first point of contact as a rookie investor. Different loans come with variable interest rates and benefits. Therefore, you must ensure that you select the most suitable loan that is appropriate for your goals and financial standing.  

Before you decide to opt for a mortgage loan, there are a couple of things you need to do. First, a sizable down payment (at least twenty percent) on the house you are currently residing is required for purchasing an investment property. This is unlike the three percent down payment that is required for regular mortgage loans. Also, there must be no debts attached to your investment portfolio. Therefore, before going into real estate investment, ensure that all your debts are cleared (such as medical bills, utility bills, student loans, etc.)

Finally, there have been predictions as to rising mortgage rates. However, this prediction should not demoralize you from purchasing your first real estate property. Instead, it ought to spur you to buy the investment property ASAP!

  • Make the necessary calculations: The primary reason for purchasing an investment property is to earn money from a passive source of income. The truth is that real estate investment comes with some costs. These costs include taxes, repairs, insurance, and mortgage payments. 

The smartest thing to do as a property investor is to keep up with the necessary costs because they can affect the flow of cash and overall return. 

  • Start your search: Although this is a task for your real estate agent, it is also advisable to carry out your research. The internet is a great place to start your search. Also, as a beginner real estate, it would be prudent to buy a low-cost house as your first property. Many experts advise that you do not purchase a piece of property that is more than $150,000. This is to provide a safeguard in case you don't have the expected returns eventually.

Moreover, you would spend more money on renovating the investment property before you rent it out or sell it. Finally, when you have selected a piece of property, ensure that you carry out a thorough analysis before you make the purchase.

In conclusion

As a real estate agent, ensure that emotions or sentiments do not lead you. Otherwise, you would make terrible decisions. Don't forget; real estate is all about economics!

 

Published by Lavismichel Inkel