It’s another mid-week, and we have a few tips to help you in your Real Estate Investment journey. We are certain it will be of great help to you.
Have you ever had a feeling of uncertainty when you want to invest in a property? asking yourself if you are about to make the right decision with your investment.
In order to guide you and put your heart at rest, we are here to help you by giving you 5 tips you need to consider when choosing the right investment.
SURROUND YOURSELF WITH SUCCESSFUL INVESTORS
We strongly believe that any investment goal you set for yourself first starts with the right mindset. Remember you become who you surround yourself with, so when you are about to invest in any property, look out for people who have succeeded in that which you are about to do. Ask them questions about their investments, do your research, and ensure you use the company of these successful investors to your advantage.
This is the first step in making the right decision for proper property investment.
DETERMINE YOUR INVESTMENT CRITERIA
Once you have begun surrounding yourself with successful investors and have done your research, the next step is to figure out what you’re looking for. Not every house out there makes a good rental, and you need to set your criteria so you don’t waste your time looking at properties that will never produce a return. There are various ways to assess a potential investment deal, but for the sake of this newsletter, I would only be telling you about THE 50% RULE and THE 1% RULE.
The 50% Rule states that your monthly expenses will add up to roughly 50% of your monthly rent (not including the mortgage). While this is more of a guideline and not a hard and fast rule, research has found it to be pretty accurate over time.
The 1% Rule on the other hand says that in order to break even or make a little cash flow every month, your investment property needs to have a monthly rent of 1% or more of the all-in purchase price.
So if using the N1,000 per month rent example, you’d want to spend no more than N100,000 to have a good chance of making money.
This helps in guiding you when you are about to make an investment decision.
Location plays an important role in property investment, as the best properties are always situated in the best location. Again, certain criteria correlate with location, as the preferred location differs based on the needs.
An abode near public transportation or education intuitions (depending on the targeted renters) will be the main priority for the need of getting higher rental yields. But when it comes to buying a property for your own stay, the priority should be in a less traffic vicinity, yet with important amenities in the surrounding area.
ENSURE YOU HAVE A PHYSICAL VISIT TO YOUR PROPOSED INVESTMENT PROPERTY.
They say beauty is in the eye of the beholder, and so also is certainty in the physical visit of your investment property.
When you have decided on investing in a property, walk around the area and try to have a friendly chat with the neighbours if there be any depending on the kind of property investment you want to make.
It is always good to familiarise yourself with the surroundings before committing to any property investment. Look out for city landmarks, proper access routes, and basic neighbourhood necessities that would aid your convenience.
In addition, it is more satisfying to pay a visit and learn about your investment property instead of doing online research or getting pointers from others.
FIND A GOOD REAL ESTATE INVESTMENT ADVISOR
Last but not least, this by far would be the most important tip you would need when looking to invest in any property.
So, how do you find an agent? Take out time to do your research for a good real estate company, or better still, ask your friends, relatives, and even neighbours for recommendations. You’ll have a list of dozens of investment advisors in no time.
Pick a handful to interact with, tell them your plans and your purchase criteria (you did write down your investment criteria, right?), and go from there.
Your investment advisor can set you up with a search of the listings that meet your criteria and can walk you through the entire buying process.
If you have read this till this point, we can tell how intentional you are with your investments.
This is why we have investment advisors primed and ready to hand-hold you through this process because we are committed to seeing your investments give you value.
To book a free consultation with an investment advisor, call or chat