In the series of golden rules here are those applicable to property investment:
1 – Always seek agreement with a willing seller
People who are motivated to sell are the most interesting to make a deal with. These type of sellers are most likely to lower the price in condition of bargain. If you are looking to buy a property to someone who does not wish to sell, you can not negotiate. So we must always seek to understand the motivation of the seller. Is he/ she selling because it is mutated, it can not meet its expenses,or to buy a bigger, smaller apartment?
2 – Do not get involved romantically
If you select a property because you like it or because the garden is nice you may miss your goal. You should always verify the calculations and figures of investment profitability. Where is your principal residence or you are buying it as an investment, the purpose of profitability should never be compromised. In the case of an investment, profitability figures become even more important before purchase of a property.
3 – Buy for the long term
Do not base the return on investment just on basis of its resale value. An investment must be profitable because the purchase price is so good that its rental income itself is sufficient to pay for its costs. Profit must be made upon purchase price not on selling price. Suppose you have taken a loan for this property for which you are supposed to pay $500 per month as EMI. From your rental income you are earning $510 as monthly rental, then automatically this becomes a profitable investment for you.
4 – Never sell
… Unless you are obligated. There are certain situations where a sale can be the best option if the property is too old or if it is accumulating repeated losses and problems. Otherwise it is better to keep and care of your properties for a longer time. If you look at successful people, they all have large real estate as their assets.
5 – There are always bargains available
He must know how to find a good property available at a bargain price. It is often a matter of perseverance. Looking for an investment may take a long time but it is not shocking to visit more than 50 properties to choose one. Do not rush (do not confuse speed with haste!). All business whether big or small is dependent on availability of a good real estate property.
I will suggest if you can have more hands, then four will be better than just two. Never try to accomplish all alone. Take help of your friends and family. Discuss with your pals before putting your money in. Do not hesitate to delegate jobs you don’t know.
As my experience says, smaller properties are more fast moving than bigger ones. The range of person you will be interested to buy or rent a smaller property (especially a house) is far greater than a bigger mansion. Take example of a one bedroom apartment and compare its buyers with a three bedroom apartment. I am sure you have understood my point. If you have an option try to buy more and more small apartments as possible. I firmly believe that they provide higher profit margins than a bigger apartments.
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