Top Successful Real Estate Investment Tips
Just because real estate prices seem to have hit a temporary ceiling in many countries around the world, that doesn’t mean that profits from property investments are hard to come by. Every year investors hope to take advantage of the right opportunities to make our lives better. When it comes to real estate investment, the decision you make can lead to significant profit or significant financial loss. So we have to look forward what it can bring us. Here are Top Successful Real Estate Investment Tips.
Know your market
Have you decided which city of which country to purchase property? Why? What have been the trends in that city for property market in the last 5 to 10 years? What other demographics and trends in that city (including demand for property in your price range)? What is the outlook for interest rates in that country over the next 1 to 2 years? What is the outlook for that country for the next five years?
Be clear with your objectives
What is your time horizon? Are you investing for capital gain or income or a mix of both? Will it be a rental property or do you have intentions to live or holiday in the property? How much of your overall investable assets would be locked up on this property?
Cash flow assumptions
Based on current interest rates what is the likely rental income per year? Will you have to borrow funds and service a mortgage? If so, how much rental income would you need each month in order to cover the mortgage? What assumptions have you made for occupancy rate (if it is a rental property).
Diversifying from more than one market
If you already own real estate, how much of your overall assets are you putting into property? If this is your second or third property, how correlated are the markets? If you have debt, how exposed are you to interest rate movements? How well do you know the market you are thinking of investing in (see point above "know your market")
Follow market updates
When it comes to real Estate, you will be tempted to invest partly on an emotional basis e.g. a country you like for lifestyle, but you must stay objective and informed: so not only do the initial market research but keep following what is happening in your targeted market