Investing in real estate can equate to financial stability, if done successfully, due to the ongoing nature of wealth that can be generated from property. Whether you’re a homeowner wanting to expand your portfolio, or a first time buyer yet to enter the market, there are many elements of investing in real estate to consider. We’ve compiled a guide on what you can do to prepare before starting to invest in real estate.
Do your research
Unless you have a career in the real estate or financial industries, there will likely be a lot about the intricacies of property investment that you will want to learn before diving in. Research the market, strategies, locations, industry trends, and terminology to prepare yourself for the journey ahead. There are various online resources to access, as well as books and webinars, to get you started.
Set your goals
What is your main reason for wanting to invest in real estate? Perhaps you’re wanting to build a small portfolio of houses to lease to tenants, with the view to one day give your children the properties. Or maybe you have big dreams of investing in commercial properties and building an empire. Whatever your goal, there is a way to make it a reality. Having a defined aim is an excellent first step to designing the future you envision.
Check your finances
It goes without saying that entering the property market usually requires a significant amount of capital investment. It is crucial to identify how you will financially manage to go ahead with your intended investments, whether that be solely on a healthy income and deposit, or if you also intend to sell other property to drive future purchases. You will also want to check your credit score, and consider whether your budget can handle the upfront and ongoing expenses of your investment. The team at Borro can help you to figure out the best way forward when starting your investment portfolio.
Study the market
You may have a vision of what type of real estate you would like to invest in, and where it is located, but do your dreams align with a successful investment? Evaluate potential areas and whether your favourite spot is realistically a smart choice – does it have local schools, hospitals, and other attractive facilities for potential tenants or owners (if you plan to resell)? There are other considerations to keep in mind as well, for example, purchasing an apartment in a suburb oversaturated with new build apartments may not be the best choice, as landlords inevitably have to keep rents competitive to catch the attention of prospective tenants.
Seek expert advice
If you’ve got a good idea of how and where you would like to invest, it may be time to seek expert advice to get your plan in motion. Book an appointment with an experienced mortgage broker for advice on how to best execute your investment goals.