Over the years REAL ESTATE has become more and more popular, and many people are seeking information on how to invest in real estate. Evidently, this has become a new way of wealth generation, it has huge returns on investment and low government taxation. But just like any other business, it has also got its own ups and downs. With this you’ll need the necessary skills, education, and experience, just to get through some of these challenges.
If you are a first-timer, you are likely to feel overwhelmed especially if your business is not picking up as quick as you thought, When investing in real estate you’ll need to have a large amount of cash flow depending on the size of your investment, also patience is key, give your business time and also be ready to learn from your mistakes.
The following are some of the key factors to consider before making your investment in real estate ;
1. Location
location is the key factor when it comes to real estate. Choose your location wisely, location will determine your sale. Some of the amenities to consider include neighborhood status, Environment, and Infrastructure. Also before investing always consider the long-term return goal.
2, Type of property to invest
There are four types of properties in real estate, they include :
1.Residential real estate
2.Commercial real estate
3.Industrial real estate
4.Retail real estate
You’ll need to do some research on each of those properties, just to be sure which one is your preferred choice. However, for over a decade residential properties have proven to be the most efficient and promising type of investment. Although it’s a long-term type, such investment is safe but it has low-profit margins compared to other properties.
3.Down payment rates
When buying an investment property you’ll probably need at least 10%>20% as a down payment. with this required, you’ll need to do a financial analysis just to be sure if you will be qualified for a mortgage.
4.Expenses
In real estate, investment is not all about making profits along the way you’ll encounter expenses that are fixed and other valuables. make sure to set a budget that must be guided by your expenses, some of these expenses are
1.Property taxes
2.Service charge
3.Owners insurance
4.Property management expense
since some variables are unpredictable always allocate some money to cater to the unexpected costs.
5.Property management
Managing your property on your own means that you will be directly involved with tenants. with this, you’ll need to be marketing your property to attract new tenants, and managing complaints and repairs. Always have an option of having a property management company that is easy to control and less stressful.
