Investing in real estate is still one of the safest ways to increase revenue. However, like with any other business, it’s best not to get into it until you’ve done all the research and have all the information about the market you’re getting into and the property you want to buy.When you finish this homework, finding the right property could secure your financial future for years to come.
Investigate the property
A newly bought property could be a great source of income or it can be a hole into which you will dump all your money trying to fix it,so that you can later sell it. Fixing up and updating a property can often become a long-term project that requires the work of dozens of different professionals. In order to make sure that this does not happen it’s best to bring a professional contractor with you and let them examine the place thoroughly. A few more professionals could also help – an electrician and a plumber are definitely necessary, and so is an interior designer, if you want to have a sense of how will the home look like once it’s furnished.
A property manager
Maintaining a property and finding tenants you can trust is much harder than it looks. There are a lot of legal matters to attend to and every tenant comes with their own set of problems or demands. If you’re managing a few properties at once, it might be best to obtain the services of a professional in this area. More often than not, their job goes far beyond managing the property – a good manager can offer you valuable advice about all aspects of the real estate business.
It’s important to get familiarized with the market in a wider sense. It isn’t enough to know everything about your property – you need to inquire about the neighborhood, the cost of construction and the way prices fluctuate. For instance, if you had property investment in Wollongong in mind, you’ll need to investigate the employment statistics, average income and crime rates in the city, as well. Also, the property market can be affected by the accessibility and prices of furniture, appliances and interior designers. You don’t have to (and probably can’t) be an expert in all these fields, but it’s important to know that they are interconnected.
Investment groups are a perfect option for those who want to invest a larger sum and don’t want to be bothered with being anyone’s landlord. They are similar to mutual fund, but restricted to dealing with property investments. A company builds or rents sets of apartments or other property and the investors buy them, forming a group. An individual can own a particular housing unit or a part of it, but the management and day-to-day operations are left to the company as a whole. In most investment groups you’ll earn a part of the revenue regardless of whether your unit is being rented or not.
Real estate trading
Real estate trading is a very different way of dealing with property investments. The goal isn’t to hold on to a property and lease it for years. Real estate traders flip the property, by buying it when it’s cheap fixing it up and getting a high return on each investment. This is a much riskier way to do business, but the profits are significantly higher as well. The key is to be able to determine what property has hidden value and could be flipped.
Buying, selling and renting a property can be a solid source of income. However, it’s a complicated business and it’s best to do a thorough research before getting into it.