Many of us are not that trustful on the data concerning residential property values. Especially now, where a lot of people are promoting property investment and it is hard to know whether that data is realistic or just for promotion purposes only. So if you’re thinking about getting into property investing, here are some tips to follow before joining the venture.
1. Have a Stable and Reliable Income
You need to have a reliable income to cope with the financial pressure that results from monthly home loan payment. Understand that buying a house with a mortgage is a big financial commitment.
2. Understand the Costs Involved In Maintaining Your Property
For most first time home buyers, the expenses in maintaining their home are surprising. Aside from the water and electricity bills, you need to spend for the maintenance of the property to make sure it is always in great condition. You need to have an understanding of the costs needed to maintain the garden, pool, floor, roofing, walls, etc. of your property.
3. Have A Finance Prepared
To have the upper hand in the negotiation process, it is important that you have a finance organized before finding your perfect property. Buyers are not that abundant and since a lot of sellers want to get the sale already, the right financing allows you to land a deal quickly.
It also allows you to negotiate for a lesser price. For funding, you can try credit unions, brokers and mortgage as they offer a large range of choices with interest rates and tailored terms.
4. Have A Sufficient Safety Net
Unexpected emergencies can ruin even your best laid plans. You need to have protection against emergencies such as injury, car theft/accident, etc. To have protection, acquire insurance on life, income and home. You can also have a savings or cash in stored to be used only for emergencies.
5. Prepare At Least A 20% Deposit
Unlike before, financiers now are stricter when it comes to their credit rules as well as selective when it comes to who to lend to. The capacity to provide a minimum 20 percent deposit is seen as a sign that you as a lender can cope with a mortgage. Financiers consider your incapacity to provide 20 percent deposit as a sign of having no financial discipline.
6. Expect To Live In The Property For 5 to 7 years
The costs involved in purchasing a property are very high. You will need to pay for the legal fees, mortgage establishment costs, stamp duty, etc.) The rise in value of your property as well as for you to recover from the expenses can take up to five to seven years so expect to live in the house for that period.
7. Have A List Of The Type Of Property You Want
It is essential to have a specific list of the type of property you wish to buy. Do your homework as the more knowledge you have about a certain property, the more money you save. To read reports and sale history of a particular house, you can visit major real estate websites or learn from your real estate agent.