If you’re thinking about purchasing an investment property, you’ve probably got a few questions that need answering. Making the right choice in property investment requires research and time, to help you on your way, we’ve put together our top tips on the DO’S and DONT’S of property investment.
DO your research in regards to the current market trends, the location of your investment property and expected rental returns. Measuring the level of rental demand is essential.
DO hire a respectable and trustworthy real estate agent who has a solid reputation in the area. Their experience and knowledge of property in the area will be useful when researching current market trends and location.
DO choose your finances carefully. There is a wealth of lending options available from different institutions and at very competitive rates. You should also talk with your current lender to see if they can match any rates or deals you find.
DO research tax laws and incentives. By knowing what benefits you’re entitled to as an investment property owner you can better plan for property repairs and prepare a financial forecast for your investment.
DO a list of essential features you need in your investment property, (two bathrooms, lock up garage etc). This will help you narrow down your search and avoid wasting valuable time viewing properties that are not suitable to your investment needs.
DONT become emotionally invested in an investment property. If you are looking to carry out renovations between tenants or before placing on the rental market, choose neutral colour schemes that will suit a range of tastes and increase the number of potential tenants.
DONT overextend yourself financially. There’s nothing worse than being stressed about how you’re going to meet the financial commitments a second mortgage brings.
DONT purchase a property if it’s ‘too good to be true’. If you’ve found a beachfront penthouse apartment for one third of what everyone else is paying, ask yourself why and trust your instinct.
DONT limit yourself to buying a residential investment property. Commercial investment properties also bring good returns for the investor. Like any investment, if you do your homework, you will reap the rewards.
DONT buy an investment property as a short term investment. Property investment demands long term commitment if you want to reap financial rewards. If you’re looking for a shorter term investment, look at equities and bonds.