Buying Investment Property
Investing in any property is not a difficult process, all you really need to do if identify a place and have the money to purchase it, but the challenge is that it is a terrifying endeavor. Either you have worked your entire life to save up enough money to put in on a home and you are praying that the neighborhood doesn’t fall apart, the house maintains it’s value, and your neighbors don’t make your life miserable. The other side of the coin is you are investing in a property to make you some passive income and now you need to evaluate the purchase from a return on investment perspective, which is equally challenging to delineate.
What I want to do is to walk through the investment side for now, to identify how we can simplify the process down into easily repeatable steps to ensure that your due diligence is completed before ever needing to worry about finding a realtor or applying for a mortgage.
By using this guide, you will be sure that you are making the best investment of your life. Getting into investing in property is not an easy thing to do, especially in a world, where it is much easier to rent or lease an apartment, but it has real monetary value if you do it properly.
So, what are the things that need to be thought through before making such a decision?
Learn from Investment Property Advisors
Walk into this decision with the expectation that you are the last kid at the party. You have to assume that you do not know nearly enough information to be able to really make decisions and find the market inefficiencies in order to properly invest yourself. However, this doesn’t mean you can’t do this, it just means you need to read up and study.
Realtors are instrumental in the home buying process, but they are also incredibly biased when it comes to your purchasing decision. Either the realtor is trying to sell the property to make their income, or they are trying to get you to buy a property to make their income. That is why it is absolutely critical to identify a realtor that will help you make your home buying process easier and more convenient.
Realtors are by no means bad people, it is just that they have clearly defined biases when it comes to this process, so you need to find someone who you can identify what their bias is and trust that they will still be able to help you ascertain your end goals.
It is important that your realtor is someone that you can trust and have established a rapport with. This is important because it is the realtor who will refer you to the best house that is available on the home buying front. He or she will be your representative in your dealings. Also, knowing your realtor will help you sort out the important steps that you need to do when finalizing your contract. Trust and confidence in your realtor will make sure that you will have an easy time.
It sounds a little funny to recommend, but I highly suggest grabbing a cup of coffee or a beer with your realtor before you ever speak about houses or markets. Get to know them a little in a non-business setting to better identify if you mesh well with this person. Find out a little about them before making a commitment, as this will be the best way for you to feel more comfortable with their recommendations and opinions.
Be Familiar with the Process
A four letter word that no one wants to hear but everyone needs to constantly have in their head is: R-E-A-D.
Read everything you can get your hands on, take notes, write down questions, and get involved in the discussions around real estate investing.
You need to know the fees and other costs that will make up your home buying decision. Paying for the house itself is not the end all and be all of a home buying transaction. There are other costs that come with it and not knowing them might catch you off guard especially when you have a tight budget set for the purchase. There are property taxes, title policies, and notary and courier delivery fees, home inspection fees among others. Just because the realtor or banker tells you you can buy a property with only 3.5% down doesn’t mean that is what you need in order to actually purchase the property. Be sure to include these fees in your budget once you decide to purchase a home for your family.
If you are going to get a loan for the purchase of the house, make sure that you know their rules and regulations regarding their transactions. Before deciding on which lender to go to for the funds for your home buying, scout around on who will be able to make the best offer to you.
It is not wise to just go to one because the other lender or bank may be able to propose a much better payment scheme for you. Make sure that you will be able to pay up on time or you will risk losing your dream house if you don’t.
Shop Around First
During the home buying process, go around and look at several houses. You can go online and check out the houses for sale in your area so that you can plot a route so as not to waste gas when going around the city. Do not make a decision based on the pictures that you see online. Make an ocular inspection to see for yourself that the house is in good order and all the utilities are working.
If you finally see a house that you think is perfect for you and your family, talk to the owner to see if you can haggle on the price. Your realtor can do that for you if you ask. When a price is agreed, it is best to thresh out the necessary paperwork right away so as not to waste time. Before you know it, you and your family are living in your dream house that you can call your own at last.
But just before you buy…
Buying a new home can be a very exciting thing. However, it is important to have a firm grasp on what the process actually entails before jumping into it. In order to help you gain a better understanding about what goes on when buying a home, we’ve compiled a brief guide of the basic steps in the process.
- An Offer Is Made – Once you find your perfect home, you will need to make an offer on the property by signing a contract. Sometimes, the offer will be for the asking price; other times, it may be negotiated down. The seller may agree and sign, or may refuse and send the contract back.
- A Deposit Is Given – When an offer is made, a deposit will be requested by the real estate agent. Although it can be negotiated – it is usually 10% of the asking price of the house.
- A Solicitor Is Hired – With all of the contracts and other legalities to deal with, it is in your best interests to hire a conveyancing solicitor for assistance when buying a new home. That way, everything will go off without a hitch.
- A Cooling Off Period Commences – Some home buyers are given a five day “cooling off” period; this can assuage any buyer’s remorse and allows you to get out of the deal, usually with a 0.25% of the purchase price penalty.
- Financing Is Arranged – Finding the financing and the home loan that is right for you can be a complicated business. It is smart to start shopping around early in the home buying process. Hiring a mortgage broker is a good way to make the process easier and more convenient.
- Removalists Are Hired – Rather than wait until the last possible minute to make plans for moving your belongings from your old home to your new one, it is smart to hire removalists Brisbane well in advance. In fact, as soon as you have a firm move date in mind you should set about arranging removals assistance from a qualified and dependable company. The last thing you need is for your smooth home buying process to hit a snag when you don’t have the proper help with getting your things from point A to point B.
- Get Help With Packaging – Most of us don’t keep the proper packaging supplies on hand, so it is also smart to find a suitable company to get the necessary supplies from. This will ensure that your priced possessions are packed adequately and can be moved without the concern of being damaged.
In all, the home buying process is a long and complicated one. With the proper help, though, it is still a process that can go very smooth.