Real estate happens to be one of the most lucrative industries from an investment perspective. However, before putting in your hard-earned money into it, it is wise to get some knowledge. For example, a lot of people are now looking for apartments in Thane for sale for investment purposes. This shouldn’t mean you should follow suit. bear in mind that not every investment can reap fruitful results. You have to be very careful and tactful when venturing into the property market.
On this note, we bring forward a handy guide for you to help you through the procedure of buying your first property. Take a look at some important things you should think of first and then investigate:
Are You Prepared for The Role?
This one’s for those who plan to rent their property as a means of having a continuous source of passive income. However, becoming a landlord comes with many challenges.
Remember that it is not only giving out a few properties for rent and earning from them. In the beginning, when you have one to two homes, landlords repair and fix things themselves to save money. However, as your portfolio builds and you get more properties, it is better to hire the services of a property management company to take care of everything.
For new investors, this is not recommended as it will eat profits. They need to get the hang of real estate investing. Being a landlord may not be the right option for you if you don’t have additional cash and into fixing and repairing things which you will have to initially.
Finding the Right Location
No one wishes to be stuck with a property in a locality that is dilapidated or needs time to develop and flourish. A potential investment opportunity is an area where the population is growing and various infrastructure plans are underway that promise an ideal location in the future.
Also, see that the property has low property taxes with decent education and healthcare facilities in the surroundings with basic necessities of a livable neighborhood.
Arrange Down payment
Compared to owner-occupied properties, investment properties normally have a large down payment. You are required apartments in Thane for sale to pay up at least a 20% down payment if there is no option of mortgage insurance on rental properties. You could also apply for a personal loan.
A Fixer-Upper is not Ideal for First-time Investment
Those with a keen eye for architecture and interior décor can buy a property and renovate it and rebuild some areas and then sell it off. But if it is your first time, then you should probably take some time till you get the hang of the entire process. If you lack the knowledge and don’t have a contractor at your disposal, who gets you quality work at affordable rates, you might end up paying too much. So, choose a property that needs only a few repairs and is priced below the market.
Paying off Personal Debt
While some investors may decide to carry their debt as part of their portfolio investment strategy, a newbie should avoid it. If you have kids heading college soon, student loans, and unpaid medical bills, buying a rental property might not work for you. Being cautious is key. Make sure you do not end up putting yourself in a situation where you don’t have sufficient funds to make payments on your debt.
Buy or Finance?
Should you buy the investment property or finance it? Your investing goals are going to determine that. If an investor puts down 20% on a house, with interest and other operating expenses, the earnings apartments in Thane for sale may not be much. Although cash flow is lower for the investor, the annual return on that initial investment is much higher compared to what a cash buyer might earn.
Be wary of High-Interest Rates
It may be affordable to borrow money. But for an investment property, the interest rates are usually higher than a traditional mortgage interest rate. If you plan to take the financing route, you need a low mortgage payment so your profits don’t get affected.
Consider Unexpected Costs
It is not only upkeep and maintenance costs that eat your rental income or returns. Bad luck can hit anytime. There could be an emergency such as roof damage from a storm or water damage. So, at least keep 20 to 30% of your returns aside to deal with any emergency expenses.
Buy a Low-Cost Home
As a beginner, it’s a wise idea to buy a low-cost home. Always remember that the costlier your home, the greater your current expenses are going to be. Also, experts advise against buying the nicest house/apartment. The same goes for the worst one (if you don’t have the resources to fix it up and make money off of it).
Learn The Rules and Regulations
You should know about the legal obligations and familiarise yourself with the landlord-tenant laws in their locale and state. So, if you want to buy flat in Thane to rent out or anywhere else, see that the payoff is worth the potential risks. However, make sure that you are realistic in your expectations. As your first rental property, it may not get you a big paycheck but things get better with time. You might want to work with someone experienced initially.