Looking for ways to expand your investment? Planning to rent out some property? Do you want to take advantage of the present climate in the real estate industry? Here are a few tips that can help and guide you before estate planning, renting, selling, or buying real estate.
It’s important to remember that real estate investing, like any other pursuit, has many risks attached to it.
Therefore, regardless of the type of property you are investing in or whether you plan to resale or rent it out later on, investment in real estate demands strong financial support. This makes it even more crucial to do an extra calculation to ensure a profit on your investment. At the minimum, you can save yourself from a huge loss.
Things to Consider Before Buying Real Estate
Don’t Let Your Emotions Play with You
People usually listen to their heart more than their logic. However, when buying real estate, don’t let your emotions affect your decision. Think of it as a business investment and analytically negotiate to get the best possible price. This is because lowering the buying price now means higher profits for you later on.
Do Your Research
Be sure that the property is located in an area that will attract the client you wish to sell or rent to. Alternatively, the location must be appealing enough for you to want to stay for a long time. In the end, an investment is not about emotions; it’s about economics.
Secure a Down Payment
You will need a down payment of at least 20% of the purchase price. This is because mortgage insurance does not apply to investment properties. Also, consider those expenses needed for the renovation before you pay your first payment.
Calculate Expenses and Profits Beforehand
Begin by calculating the money you already have and you can arrange for. Next, calculate the additional cost of purchase and renovating the property. This calculation is crucial to keep yourself in a safe zone.
Consider Investment Loan Options
Different investment loan options come with different benefits. Among the available loan options, choosing the option that could make a positive difference to your financial situation requires a lot of research. For example, one option would be a loan that provides a line-of-credit.
Tips to Consider Before Selling Real Estate
The Perfect Time to Sell Is When You’re Ready to Sell
The most vital thing to realize is that you are all set and ready to sell your property. Therefore, consider speaking to the real estate agency, especially if you are unsure. Reputable agents would advise you instead of pressuring you to sell.
Be Picky When Choosing Your Real Estate Agency
The agent you choose should be a wellspring of advice and knowledge on how to get the best result from the sale. This includes giving you a clear idea of the costs involved, as well as documents you will need to provide. Moreover, your agent should give you an overview of the entire process, including legal formalities.
Fix Material Defects but Do Not Spend Unnecessarily
You should depend on the wisdom of your agent to decide what on the property is a material defect and should be fixed, what additional renovation may add value, and what isn’t worth overhauling.
If You Choose to Sell, Commit Fully
You’ve got to be organized to make the property accessible for a visit by a potential buyer, within reasonable limits, of course. However, keep in mind that the longer real estate is on the market, the likelihood of a sale diminishes.
Be Your Property’s Ambassador
A lot of buyers decide to make an offer based on the personal connection they create with the property. This is why sellers need to show their property themselves. As the seller, you know the property best and are probably best positioned to offer potential buyer insights on what owning and living on the property is like. Tell everyone in your contact list that you are selling it. Further, hype up your property on your social media platforms.
It’s Not Over Until the Transfer Is Completed
So you’ve accepted an offer to purchase, the buyer’s bond has been approved, and the transaction is now with the conveyancing attorneys. However, it’s not over yet. Therefore, continue to keep the property in good condition and maintain all its insurance. In other words, it must be ready to be handed over to the buyer on transfer day.
Guide to Renting Out Real Estate
Renting a residential property can add onto long- or short-term income. Moreover, it can give you significant tax advantages as well. However, if you intend to rent out real estate, be prepared with the following checklist:
- Understand the landlord-tenant laws in your area.
- Inspect the property thoroughly.
- Prepare your home for renters.
- Know how to conduct a deep background check on prospective tenants.
- Know your rights and the rights of your tenants.
- Hire a professional to help you navigate the financials.
- Make sure your tenants are paying rent regularly.
- Establish a good relationship with your tenants.
- Help your tenants to know their surroundings, neighborhood, and city better.
- Document all communications between you and the tenant.
- Schedule with the tenant before visiting your property.
- Photograph the property before you finalize the rental agreement. This will help to avoid any future conflicts.
- Try to leave a good impression on your tenant.
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