Questions to ask yourself before you buy property

<img src="new house.jpg" alt="New house" width="300" height="201">

What you should know when buying property

Benjamin Franklin hit the nail squarely on the head when he said, ‘An investment in knowledge pays the best interest.’ When you are interested in investing in real estate, you should research your chosen market very carefully.

Ask yourself the following basic questions before you buy property to re-sell in future or rent out:

Question 1:
Would anyone be interested in buying the property from me at a higher price in future?

What will add more value to the property in future? Investigate the area in which the property is situated. Is it close to amenities such as shopping centers and schools? What is the crime rate for the particular area? (People will more readily buy property in a safe neighborhood.) What new developments are planned for the area in future? Will the new developments attract or deter potential buyers? Will it be easy for the owners to commute to work?

Question 2:
How much will I have to fork out to make the property more attractive for potential buyers?
Consider whether it will be worth your while to buy property on which you will have to spend extra before you can re-sell it in future. You will need to keep abreast of trends in the property market. Current buyers consider certain features as must-haves, for instance, a well-designed kitchen with plenty of working and storing space – a kitchen island is considered a high priority. Security features may also go a long way towards upping the desirability of property.

Question 3:
Are you looking for steady and reliable income at a possible risk to asset growth?

Instead of investing in one expensive property, you may want to invest in two or more cheaper units for the same amount of money. This strategy may help to protect your rental income risk. Say for instance the expensive property tenant skip a month’s rent – you’ll lose all your rental income for that month. If a tenant from one of your lower market units skip a month’s rent, you’ll still draw rental income from the other tenant/s. Keep in mind that lower market property may not appreciate in value robustly.

The golden rule for investing in property is to look for a good quality property at a fair price in a sought after area.

After you bought property, you’ll need Home Insurance for sure!