If you’re tempted by the idea of investing in residential property, then it’s obviously going to feel like a pretty daunting challenge to rise to. The most experienced property investors out there will have had years to learn from their mistakes, and formulate a method that gives them the best chance of success. If you’re not quite there, here are some rules you should follow to get the highest possible returns.
Buy Property That Will Grow in Value
I know this sounds obvious; after all, owning something that increases in value is the most basic principle behind any kind of investment. However, there are countless people who still manage to make rash decisions when they first get started in property investments, and wind up sitting in properties which do nothing but stagnate.
Look for residential properties which are close to a thriving business district, schools, beaches, and leisure facilities, as these will have the best chance of piling on value. New build developments such as the ones from Serenity Homes also usually have bright futures.
Create Equity Through Renovations
Easy, low-cost renovations, such as a fresh paint job, new flooring, extensive landscaping and so on, will have a huge impact on the value of property, raking in equity with minimal strain on your time and money.
As soon as you’ve polished off the purchase, you should be making plans to carry out some home improvements and generate some instant equity. Just make sure you’re doing your homework beforehand though.
Certain additions, such as pools or ultra-modern features in a rustic house, can in fact sap the value of a home, rather than bolster it.
Give Yourself a Safety Net with Refinancing
When your property begins to grow in value, it’s a good idea to refinance it, and give yourself a buffer which will act as a financial safety net. When you protect yourself through refinancing, you’ll be able to rest easy about the future of your investment to some degree.
All too often, would-be investors fail to take this step, hit some rough waters, and find themselves unable to keep up with mortgage payments. If you get yourself into a forced-sale position, the best price for your property will be out of your reach, and you may find yourself having to deal with expenses like capital gains tax.
Get an Independent Valuation and Don’t Get Emotional
If there’s one mistake in property investment that you should avoid at all costs, it’s bringing your emotions into the picture. Countless investors let their emotions get the better of them when they’re searching for prospective investments, and end up buying a property for far more than it’s really worth.
You’re probably not experienced enough to value property on your own steam, so consider getting an independent valuation done. While these aren’t exactly cheap, it’s the fastest and most effective way to protect yourself from paying too much, and shooting yourself in the foot further down the line.
When you dive into the real estate market, be sure to keep these tips in mind!