Buying An Investment Property

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Buying An Investment Property

Real estate has long been considered to be a strong option for investing your money. Property often holds its price well and appreciates over time, assuming that you make a good initial investment choice. There are various points to consider if you do choose to go down this route, along with different ways to make a profit on your money. 

Funding your investment

If you have the whole sum ready to invest in cash already then this part is relatively easy for you. All that we would point out is that negotiating as a cash buyer puts you in a stronger position when making a purchase, so be sure to make realtors aware of your situation. 

If you do require funding alongside your cash investment you can either partner with others or look at investment property loans. You will need to compare the rates on offer, fees payable and your own eligibility to meet the lenders’ criteria. 

Real estate agents

Real estate agents can be helpful in both assisting you in finding the right property and then aiding you with the legalities and searches that will need to be carried out. As such, it is worth contacting several in the area that you are looking to buy in and giving them a clear idea of what it is that you are looking for. 

Do keep in touch with them regularly to remind them of your requirements and ensure that you are the first person that springs to mind when the right property becomes available. 

Buying a property to sell 

If your aim is to buy a property that you wish to sell on relatively quickly in order to make a profit, then there are a few things that you will need to keep in mind. 

The first will be the location of the property. You need to ensure that you are familiar with the local area and property market so that you are buying at the right price in the right area. Do check on any upcoming changes and developments in the area, such as transport links, schooling or facilities opening or closing, as all of these can impact the value of property.

Along with the value of the property, the saleability needs to be considered. If you are looking to renovate the home and then put it back onto the market, how quickly is it then likely to sell? You will need to factor in the costs of continuing to pay the loan for several months if there is a downturn in the property market.

The final thing to bear in mind is that areas and therefore houses can have a ceiling price. Be careful not to invest in too great a renovation project that you fail to make the funds back on your investment. 

Buying a property to keep 

There are several options for you if you are looking to buy a property to keep.

Firstly, it is worth exploring adaptive reuse as a means to rejuvenate an old building by bringing it back to life as a facility needed and wanted by the local community. Businesses and construction companies hire experts who specialize in this field so it is worth making inquiries with them whilst you are looking into your purchase as they can give you a better idea of the work involved and projected income. 

Alternatively you might like to buy a property and then rent it out. This might be one unit or perhaps an entire block of apartments, there are many possibilities. To do this, you will need to understand the projected rental income, or existing income if the property is currently being rented out. You might choose to renovate the home before renting, so again, you will need to run the numbers to check that this remains a financially viable option before purchasing. 

You might choose to buy a property to use as a vacation rental, letting it out from time to time. This can work very well in a prime tourist spot and it could also give you a place to have breaks yourself from time to time. As with longer term rentals, look into the proposed income with this option, factoring in peak prices during peak season.

As a final option, you could buy a property and simply keep it as a second property. As the house value goes up, so does your investment. This would need to be an investment over the long term to see any real return on it, and you would want to have very little to no loans outstanding on the home to make this a viable option.