In deciding on any business venture, it is advisable to take certain steps in order to avoid disappointment and be aware of the challenges and risks involved in the business you intend to set up. In this article, we will centre on real estate investment and the key factors to consider before making a decision to buy your first investment property.
Set a goal or objective
Be sure to remind yourself of the goal you are pursuing while you invest and work towards it. As this will guide you in meeting your objectives. It can be useful to talk to other who have done something similar and be realistic in your commitment and everything you need to achieve your set goal.
This is the first and one of the most important step required to make an informed decision necessary on the investment you aim to venture into. Ask questions from friends, experts, and get guidance from professionals or consultants. Also, make online research, before you proceed. There are available resources to guide you.
Start where you are
Find out what works locally and seek professional help. Get involved and you stand to gain experience which is very important in real estate. Start with your local market. Every market has investment opportunities.
Keep it simple
Bear in mind that if it is a bargain, there is a reason. Your first property ought to be an easy one. Buying an investment property for a realistic price with leverage and some cash flow is what you should aim for. Understand that you probably have a lot to learn in on the way.
Plan for the future
This is one key aspect to consider, as each investment should add value to your big picture strategy and get you closer to your end goal. Consider in a scenario how to weather any potential recession since you will only recognize an actual loss if/when you are forced to sell property. Don’t be tempted to buy a property that doesn’t have much cash flow. Look out for rental property with a target ROI of 15% or more and target rents should equal at least 1% of the purchase price.
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