The young generation is coming into their own and making waves in the business world. They’re savvy, creative, and not afraid to take risks. And among countless investment choices, many are turning to real estate property investing. According to a report by Harris Interactive, 55 percent of Millennials are showing interest in real estate, with most of them saying they’re likely to invest in the next five years.
But as with any investment, there are certain things to keep in mind. Here are rookie mistakes to avoid for those considering entering the world of real estate property investing:
Not Doing Your Due Diligence
Before investing in any property, you must do your due diligence. That means research, research, and more research. Entering real estate investing without knowing the ins and outs is a recipe for disaster. Not only do you need to know the market, but you must also be aware of the competition, the area, what repairs are needed, and more.
With the internet, there’s no excuse for not being thoroughly prepared before making an offer on a property. Use every resource at your disposal to learn as much as you can. You can even talk to other investors and get their insights and advice.
By being knowledgeable about the market and the property you’re interested in, you can avoid making other costly mistakes. So, do your homework and know what you’re getting into before taking the plunge.
Overpaying for the Property
Just because you’re excited about a particular property doesn’t mean you should overpay for it. Remember, this is an investment, meaning you’re looking to make money off it down the road.
According to a report by CNBC, 72 percent of investors said they regretted purchasing their property. So, don’t get too caught up in the emotion of things and lose sight of your investment goals.
It’s essential to have a clear idea of what the property is worth before making an offer. Several factors can affect the value of a property, such as location, the condition of the home, recent comparable sales, and more.
Get help from a professional appraiser or real estate agent to estimate the property’s worth. This strategy will ensure you don’t overpay and can help you negotiate a better price. With their help, you can also develop a realistic renovation budget.
Not Knowing Your Loan Options
Several loan options are available when it comes to financing your investment property. But many first-time investors don’t take the time to learn about these choices and end up using the wrong one.
The most common mistake is using a regular home loan to finance an investment property. But investment loans usually come with higher interest rates, shorter terms, and different conditions. So, knowing your choices are essential before signing on the dotted line.
Talk to a mortgage broker if you’re unsure which loan is best for you. They can help you compare interest rates, terms, and conditions to find the right loan for your needs. This way, you can save money and avoid financial stress down the road.
Failing to Consider the Environment
When purchasing a property, it’s essential to think long-term. That means considering the surrounding environment and whether it’s conducive to your investment goals.
For instance, if you’re planning on flipping the property, you’ll want to buy in an up-and-coming neighborhood where home values are expected to rise. But if you’re looking for a more stable investment, you might want to consider a family-friendly suburb.
You also want to invest in a property near famous landmarks and other amenities as much as possible. Such locations are usually in high demand, which can help increase your rental income and make it easier to find tenants.
In the Philippines, Manila is a great place to invest in real estate, as it’s filled with popular tourist destinations. And with many developers seeing its potential, there are plenty of new projects to choose from. So if you want to make the most of your purchase, a high-end condo for sale near Manila Bay is sure to be a wise investment. In doing so, you’ll be able to take advantage of the city’s booming real estate market.
Purchasing a property is a big decision, so do your research and avoid making rookie mistakes. By following the above tips, you can ensure you’re making a wise investment that will pay off in the long run. There are many things to consider when investing in real estate, but as long as you’re prepared, you can be successful. So start doing your research and get started on your investment journey today.