Investment in the property sector has many risks. However, if it can be controlled, the profits will also be doubled.
Knowing and managing the potential “risk” in property investment is very important, so you don’t get lost in the wilds of purchasing, financial, and momentum errors.
Here’s the most important part:
You need to start right now!
Here’s 6 advice from American property expert, Leonard Baron, for your investment in the property sector to make profit.
1. Understand finances
When you buy a property, make sure it is a smart financial decision.
Renting makes more sense than buying if the property offers positive cash flow and provides a fair rate of return on the invested equity.
Investors should not buy property with negative cash flow. If you were investing on a negative balance sheet, you might realize it is better to invest money elsewhere in the asset with better returns.
2. Buy property in good condition
It’s almost certain that some investors always spend more money to repair the properties they have purchased.
You will see if it’s profitable; buy property, fix it and resell it to high-profit.
In fact, the scenario is not as easy as that. On the contrary, this story could be ended tragically, i.e., losing money.
It may work for a building contractor who is experienced in estimating repair costs. However, for you who still lay, the worst is to lose a lot of money.
3. Secure long-term funding
Make sure to take long-term financing with a fixed interest rate to finance a property.
Try doing only one financing for one purchase and enjoy peace of mind. In this way, you do not have to worry about changes in interest rates in the future.
4. Review all documents
All buyers should review everything related to property documentation, such as insurance.
Schedule an hour for an insurance agent to take care of everything in detail so you can resolve any issues before buying.
5. Property and insurance
Make sure the insurance you choose is appropriate as needed to protect certain property. You should sit down with an insurance agent and discuss the financial picture and completeness of the insurance.
So that if something happens, such as a fire, or flood, the insurance company will work to reduce the significant impact on your finances.
6. Manage the rentals well
If you purchased a property for rent back, be sure to get a good tenant.
Keep the lease period as long as possible by the way; treat tenants well, make sure they keep your property in good condition.
If there are any complaints, treat it immediately.
That way, you will “print” more money than the hassle to overcome. Remember! Treat tenants as you would like to be treated.
May the advice above will reduce the possibility of property issues that can undermine your time and money.