Property investing has been very popular as of late and we have even had some clients ourselves who plan on flipping a newly purchased property. Purchasing a property in order to make a return is a smart way to invest your money (if you do it right), so it is important to keep your head on your shoulders and your vision still in your reach. There are potential factors that could make your investment a flop and that you should try to avoid. Here are some of our best tips that you should incorporate into your newest venture.
Have good judgment - house hunting is a roller coaster of a ride for many potential buyers. However, as an investor, it is important to not let your heart cloud your judgment. It will not be your forever home, so finding a dream property that isn’t necessarily best for your financial gain can be the first pitfall you find yourself in. Factors like location, size, and functionality are important if you want to find future tenants, renters or buyers.
Be patient - it is important to go through careful planning and setting goals so that you can monitor all of your accomplishments little by little. Property investing is not the type of investment that will make you an overnight success. Instead, you need to be patient and give in your time, effort and money in order to see a great return in the future.
Be smart and informed - do some research on the market and surrounding areas and ask your realtor for their advice and knowledge as well. Financial fundamentals are also very important as these skills will be the reason you have a financial advantage. Being well informed on both the market and your finances is what will help you create success.
Do the math - figure out all the numbers. How much will the mortgage be? Taxes? Utilities? Repairs? What will the rental costs be in order to make sure you still maintain a profit but is it still an appropriate price? By laying out all of your expenses that it will take to run this investment property, you will be able to properly analyze and calculate how to make it into positive cash flow.
Prepare for landlord duties - if you are not planning on immediately selling this property and are looking for renters or tenants, you will have to take on the duties of a landlord. You will have to take care of finding a good renter, collecting monthly payments, fixing any repairs or issues that may arise in a timely manner. This will become another job you will have to take on that you will need to make sure you can take on and accommodate to the satisfaction of your renters at any given time. It is both a high pressure yet rewarding job that property owners can attest to.