Thinking about buying a house or a condo for yourself, or maybe simply to rent it out. But don’t know where to start? Well you don’t need to sweat as we are here to guide you. First of all, you should know that you have made the right decision to invest in real estate. Compared to other investment it is less risky and generally more profitable. That is if done right. Here we will explain, what kinds of real estate you can invest in and what you need to know before doing so.
Types of Real Estate
1. Residential Real Estate
The properties categorized as “residential” include:
Houses
Condominiums
Holiday homes
So, they include any place where people can live.
This is typically the easiest area to consider for an investor starting to invest in real estate. The experience and knowledge required to make an investment in the residential sector may be less.
2. Commercial Real Estate
Commercial properties include:
Stores
Offices
Shops
Shopping centers
Storage unit
Sheds
These are usually more expensive and complex than residential and the management is often done jointly with other investors or property managers.
How do you buy a property to rent?
The first thing is to know the local market where you are going to invest. And if you know the neighborhood well, you are much more likely not to make big mistakes to regret. If you know the neighborhood, you are more likely to be able to make a smart purchase at a competitive price.
What to watch before buying:
· Transport (is it a well-connected area? Are there new urban lines?)
· General state (are landfills or plants planned in the next few years?)
· Inhabitants (are there ghettos? Is the neighborhood attractive to anyone or only to certain ethnic groups?)
· Services (are there shops, malls, banks, schools, restaurants?)
· Evolution (how have prices changed in the last 5 years?)
How do you invest in the real estate sector?
Be patient
Investing in real estate can take a lot of time, even if it doesn’t seem like it. Repairing a property after purchase or before it is sold is not easy and expensive. Basic maintenance is also a regular task that needs to be addressed and it can be done using Hitachi Credit Liverpool Victoria.
Some real estate investors outsource maintenance and / or management to dedicated companies at an additional cost. Great, I say, but this must be put in the business plan before starting, not after.
Legal liability
To be safe, it’s a good idea to speak to a real estate attorney (at least) before making your first purchase. Taxes and liability change completely if you invest as an individual or as a company. Doing it as a company costs more, has advantages, but if the investment fails, the investor’s assets remain protected.
Passive Earning
Having a house or condo that you can rent out is a great way to passively earn. You don’t have to do anything but collect your monthly rent check. The most that is required by you to do is take care of any maintenance that is required by your tenant.
Best of all in time of you need, you have an asset that you can liquidate quickly to get out of any financial troubles. Generally selling a property can take time but if you are really desperate you can sell house for cash. There are always buyers for that and it all depends on how motivated you are.