What should I consider before buying a real estate property?

Excellent question! Buying investment property might not be as easy as you think, and it actually needs an entire process of preparation beforehand and different factors to consider in order to succeed in the real estate world and avoid risking your money. Here are some major questions you need to ask yourself before actually buying investment property.

Do I really know the housing market?

A thorough understanding of the local real estate market is extremely important before buying investment property. As every area or neighbourhood has different nuances in regard to properties’ values, you first need to conduct real estate market analysis to determine the current market values of properties and the situation of the local and national market and based on that decide on the best timing to buy investment property.

The flexibility and changeability of the Singapore housing market will always keep it in constant booms and busts, making it hard to expect specific times of increase and drop in investment properties’ prices. Therefore, you need to constantly check and study the housing market in order to invest in places where the return on investment is high and the risk is minimal. It will also let you decide on how much to charge for rent in case you want to invest in rental properties.

Am I really aware of the expected return on investment?

Financing the purchase of investment property is absolutely not enough as you have to take into consideration additional fixed and variable expenses including but not limited to: annual property taxes, insurance, regular maintenance and repair expenses, and unexpected damage costs. Investing in real estate gives you the opportunity to either rent out the property you want to buy and generate rental income or take advantage of future appreciation by selling the property. In order to decide whether a certain property is worth buying and expected to generate positive cash flow or not, you need to calculate the total return on investment.

Here’s How to Calculate Return on Investment in Real Estate: 5 Different Ways

What type of investment property is best to invest in?

Within the different types of properties real estate investment offers, you should choose a type that best suits your budget and your long- and short-term plans in order to reach the optimal investment strategy.

Rental investment property is the most common investment type that investors use where they secure regular income from short-term rental income through Airbnb or traditional renting. However, a major disadvantage of rental properties is that they need regular maintenance, unexpected damages’ costs may occur, interacting with different types of tenants and commitment by the landlord are required.

Another common way to invest in real estate is buy to sell strategy, which gives you the chance to buy a property and sell it later for a higher price. However, you have to keep in mind that it is not totally guaranteed as it depends on the housing market and the properties’ changing values.

Where should I buy the investment property?

Location is paramount when deciding on buying investment property and plays a huge role in determining the return on investment, the property’s value, and what types of tenants or buyers it attracts. Therefore, before buying investment property, you have to plan on whether you want to use the investment property as Airbnb vacation rentals, for traditional renting, or benefiting from future appreciation.

How to search for investment properties?

The more you search for investment properties and compare their values, the more your chances of buying the right property increase. You first should know where to look and decide whether you want to buy a property in your state or out-of-state areas and use online database and services to help you navigate through your options. Networking with other real estate investors or people working in the real estate field will open more options for you to buy investment property and get good deals. You always need to search in a place where demand forces and occupancy rate are high.

These are the main factors to consider before buying an investment property. Khai Rambo can be your guide to help you navigate through the real estate world every step of the way before actually buying your investment property.

Start Your Investment Property Search! Check out Developer Website: Treasure At TampinesThe Florence ResidencesStirling Residences & Whistler Grand

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