It’s tricky, but with due wisdom and strategic financial savvy, real estate can prove to be lucrative for investments. Take heed of these starter tips for the first-time investor.
Check your credit score. It’s crucial in securing your mortgage. Good credit history arises from paying your bills on time, managing your finances wisely, and low debt-to-income ratio, among others. Many digital resources, like apps and websites, offer services for computing and managing your mortgage with respect to your income and expenses.
Determine what you want. A house and lot, a condominium unit, an apartment building, a retail space - choose according to what’s within your means and what’s ideal given the climate of the real estate market. Read up on the state of the market in reputable business and financial publications. Take note of supply and
Select a good location. It’s often location that dictates property value, apart from the property itself. The neighborhood should be desirable to live or work in. Do due diligence in your research. Look up the neighborhood in reputable sources and consult locals, real estate experts, and compare notes with fellow investors about the area.
Choose your loan carefully. It’s the interest rate that can make or break your investment decision. Mortgages offer different types of interest rates: floating, fixed rate, and a mix of both. Each has its own advantages and disadvantages. Floating rates offer flexibility: you can change the terms of your mortgage or pay it off early without penalty. However, floating rates are often steeper than fixed rate, and susceptible to inflation in the future. Fixed rate mortgages provide a set figure in terms of repayment, by contrast. But these mortgages often impose penalties for any adjustments made to the payment scheme or term. An investor can navigate the provisions of both fixed and floating rates by opting for a mortgage with a combination of the two.
Consult with experts. It’s best to have these professionals on hand for advice: a real estate broker, to assist in finding and selling property; a lawyer, to see to the legal documents; an accountant to lend an expert hand in your finances; a home inspector and a contractor to evaluate the condition of the property and make any due renovations.