Buying Investment Properties

Buying investment properties is a great way to build up assets for your retirement, or as an extra form of income. But there are common mistakes which people make which have certainly contributed to the global recession in 2008 and 2009. However, for a cashed up buyer, now is as good a time as ever to get into the real estate game, as there are plenty of bargains to be had, and good value to be gained if you know what to look for. In this hub I will try to provide you with some starting points to show you what you need to consider and look for when buying investment properties. However, this hub should not be consider financial advice in the legal sense, and if you are considering buying investment properties, I strongly suggest you seek advice from a professional.

Location, Location, Location

When people are looking to buy a home, likely the main consideration other than the dwelling and section itself will be the location. For the same reason, one of the most important considerations you should make is what location should you buy in. Researching the neighbourhood, the next door neighbours, pros and cons for the location is key. Why would people want to live in this place? Is there seasonal trends? Will it still be a nice place to live in, in 10 years? Who will be suitable to live in this property? If you can think of solid answers to these questions and the signs are good, then you are probably on the right path.

Does it all add up?

The other main consideration when buying investment properties is the money side of things. And here it all really needs to add up. Too often people make excuses to buy properties, when they should be heading the other way. The best way to work out the money side of things is to make a new spreadsheet. If you don’t have Microsoft office, Google docs has an excellent spreadsheet application which is a free online application. You need to make headings for all your expenses. These vary from property to property, and country to country. Typically you will include taxes, rates, maintenance cost, property manager if you use one, and mortgage payments. Plus up front costs when you purchase the property such as building inspection cost and lawyer cost. Once you have worked out all the costs involved you then need to work out how much you are going to charge tenants for rent. If they amount required to break even is more than you are likely to be able to charge and find tenants, then that property might not be a good investment in property.

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