If you are about to purchase your first piece of property for investment rather than to live in, it is crucial to make a mind switch.
Entering negotiations with the same attitude you had to purchase the family home could leave you wishing you had invested elsewhere.
- It does not matter if you like it
Personal taste is crucial when buying somewhere to live. However much of a financial bargain a place seems, you are not getting good value for money if you hate living there.
When you buy to lease or flip, you need to put your tastes aside and decide what your target renters or buyers would like. For example, you might love a home with low ceilings, cozy rooms and purple walls that reminds you of a hobbit house. Yet if your target market is affluent young couples, you probably want something with white walls and an open plan design.
- You do not have years to wait
If you buy a home for your young family, you may look to stay in it until the kids leave home. As long as the market is up when you think about downsizing in 15 or 20 years, what it does in between is irrelevant.
You need to be sure property prices will likely rise when you buy to flip. That way, you can bank the profit and reinvest to keep your money working. If you buy and the market stagnates, you make nothing until it rises, and you can sell at a profit. For rentals, the market rental rates are more important to reaching your investment goal than market sale prices.
Investing in property can be a great way to make money. Yet there are many pitfalls for the unwary first-time investor. Getting legal help from an experienced team gives you the best chance of ensuring your investments succeed.