Investing in real estate can be a lucrative business, especially if you put your money on the most saleable ones similar to what you’ll find on the website https://precondo.ca/new-condos-etobicoke/. Etobicoke is characterized as highly industrialized with spacious open fields and parks, making it a great neighbourhood. This is a major draw for many buyers and tenants. You can expect a sizable ROI.
Just like any other business or investment, it comes with risks too. Hence, proper research and understanding of the real estate industry are important before you go into your first investment.
Aside from these, the following things should also be considered and will help your first investment more rewarding.
1. Choose logically, not emotionally.
Some people tend to buy a house or a property because they “fall in love” with it. This is fine if you intend to live in that house for a long time. But if your goal is to get a profit from it, then you should not let your emotions get in the way when deciding to buy a property.
Buying a property because of the connection that you felt with it, will cause you to buy it at a higher price. Thus, it will affect your profit margin. To make a good profit, you should choose a property based on numbers, and how it can perform for you.
2. Do market research.
Knowing the market condition is a very important thing to consider in real estate investment. You need to check the real estate market trend. If the properties are being sold at lower prices, that is the best time to buy your property.
Then, you sell your property later on when the market condition shifts to a higher selling price. You may also check the prevailing real estate market trends. It will show you the best months to sell your property and the types of properties that are doing well in the market during different times of the year.
Knowing the perfect time to buy or sell a property is an edge in real estate investing.
3. Consider the type of property that you wanted to invest with.
In real estate investment, you can choose from the four main types of properties. These are industrial, commercial, residential, and retail. Among the four, residential is the most common type of property to invest in.
This is true as it caters to one of the basic needs of people which is shelter. It is easier to sell or rent out residential properties compared to the others, but it is also the one with the lowest profit margin.
The rest of the properties can bring in higher profits, but the risk of being vacant for a longer time is also higher. The performance of these properties is also dependent on the economic status of the location of the property. Hence, you need to decide on the type of property first.
4. Do your due diligence.
Personally checking out the property is commonly known as due diligence in the real estate industry. It is a must to visit the property, search for possible repairs or renovations and check its location and nearby establishments or developments.
Doing your due diligence will give you a clearer picture of the property’s condition hence, it will be easier to calculate possible expenses that will go with buying the property. Understandably, since it’s your first time, you might not know yet all the things that you need to check when doing your due diligence.
That is why, it is also advised to find a partner, an experienced real estate agent or investor, whom you can trust to guide you and teach you with the things that you need to check when you visit a property for due diligence.
5. Calculate the amount of money that you will need and your target profit.
Real estate investment requires an intensive amount of capital. If you intend to buy a house and resell it, then you will also need to consider possible renovation costs. The same goes for renting out your property, which will entail maintenance and repair costs.
You might also need to set aside enough cash for unforeseen expenses. Simply put, investing in real estate means you need access to a large amount of money. Thus, you need to ensure that you have enough resources before venturing into this business.
Once you are done calculating the amount that you might spend, the next step will be to estimate your listing price or how much you will sell the property so you can come up with the estimated profit.
A stable personal income is also needed when investing in real estate. This is to ensure that the cash intended for your investment, will not be diverted to your expenses. The cash meant for your expenses, should also not be factored into your investment.
6. Check your credit score.
As mentioned, huge capital is needed to invest in real estate. Hence a good credit record is necessary before going into your first investment. Loans can be added to your resources.
Maintaining a good credit score will make it easier for you to get loan approvals. Thus, it is advised to pay your debts such as medical bills, school loans, etc. before your first investment.
7. Choose a property that is in a good location.
Location is a very important factor that should be considered when choosing a property. A good location means the place is safe and accessible to transportation hubs. It should also be near commercial centers and schools.
It is also important to check the developments near the property because the developments within the vicinity, can affect your property’s performance in the long run. A centrally-located property can bring you higher returns.
8. Start learning about sales techniques and marketing strategies.
Eventually, you will have to sell or rent out your property. So, it is imperative to have a basic knowledge of the techniques and strategies that you can incorporate in selling your property.
If you don’t know about these yet, you may learn this firsthand from professional and experienced real estate agents or investors you trust. Get yourself a mentor. Combine this with taking free online courses and you’ll be a good salesperson in no time.