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What to Consider Before You Invest in Residential Property

Is residential real estate ever a good investment? In a word, yes. In more words, absolutely yes. Residential real estate is a fantastic investment opportunity that can generate ongoing passive income for investors and can also be very beneficial in the long term as the value of the property increases over time. Arguably too, 2021 is one the best years to start investing in property, given many people, following elongated periods of not being able to leave the house, are looking to relocate somewhere new.

Of course, investing in residentially property does come with risks, especially when you haven’t made sure that you actually are ready to begin investing. It’s for these reasons that many choose to seek the guidance of experts in property investment.

Purchasing a house, apartment block or some land can be extremely expensive, that’s without considering the fact that they will come will ongoing maintenance costs that, due to the potential for income gaps, you may well be responsible for. As such, before you make the decision to invest in residential property, there are a few things to consider prior to deciding if it’s right for you.

Ensure You Have Sufficient Funds

If you do not have the money to afford residential investment then you may want to rethink what you invest in. You shouldn’t borrow money in order to purchase the property and if you do, you should be sure that you are able to afford the mortgage payments without rental income. There are calculators available online that will allow you to decide how much you can afford on a mortgage.

When you have people renting the property, you can have high turnover. That being said, you may also experience periods where you have no renters, which of course means no rental income. If this is the case, the property you have purchased may end up being a financial burden, as oppose to a way to build wealth. Not to mention, by not paying your mortgage, you may end up damaging your credit score in the process, which will cost even more money in the long run.

Plan Out What Your Expenses Are

If you are purchasing real estate as an investment, then there will be expenses incurred as a result. This includes the likes of taxes, utilities, upkeep and repairs. How you choose to deal with these issues is entirely up to you and how much of an influence you would like to have on the property. For example, if you would like to be quite hands on and fix problems yourself, then you will be aware of these issues already. Whereas, if you do not want to be so hands on, you may wish to consider going through a rental company. Whilst this will cost you, it can help ease the burden of owning a property for investment.

Carry Out Extensive Research on the Property

We have all heard many horror stories from people who have bought a property without carrying out the proper research. Whatever you are doing, whether it is buying a home, flats or land, you need to ensure that you are carrying out extensive research to confirm there is nothing that will lower its value over time, or make people hesitant to rent it.

If you are buying land then you should inspect the land deed. Are there any new roads planned that could affect value? What kind of a neighbourhood is it in? Are you near any noise polluting areas?

Don’t Be Afraid to Ask for Help

Investing in property is an incredibly exciting thing to do and especially in today’s current market. That being said, there will be moments when you question whether you have made the right choice and what the most efficient way to move forward is. It’s in these times that should ask for help. Contact experts in property investment to find out what your next move should be and how you can set about achieving it.