Real estate has always been a favourite among investors – while it lacks the drama and excitement of the stock exchange, it adds a certain gravitas; a certain sturdiness to investment.
Here are three important things you need to remember when investing in real estate.
Choose low risk
Investing in real estate is one of the safer investment options, but by no means is it without any risk. You need to do careful and comprehensive research before investing in real estate. Consider factors such as future development in the area (this is something that can either add to the value of the property or completely devalue it); the condition of the property (too many people buy fixer-uppers that just cannot be fixed); the financials and administration around buying property, especially the tax implications.
Make sure it’s worth the effort
While the ideal is to buy a residential property and rent it to a nice, quiet tenant who pays on time and takes care of the property, the reality is not always so. Some properties require a boatload of work, which makes it less of an ideal investment. Examples would include real estate near colleges or campuses (students aren’t always the most reliable tenants); holiday rentals (usually a once-off, short-term rental so there is no incentive to be good tenants); as well as older properties that require more maintenance and upkeep, which means time and money.
A steady cash-on-cash return
As opposed to investments such as stocks and bonds, investing in real estate has you investing your money in a solid asset. It’s tangible. Real estate rarely depreciates in value – there is only so much land available and we cannot create more of it. Nonetheless, you need to ensure that the return on your investment in real estate is a cashflow-positive investment compared to the investment you could have made in stocks and bonds. In short: choose the right property.
By following these three top tips when it comes to choosing the right real estate in which to invest, you can make the smart choice and have an investment that makes you money without you having to lose sleep.
Mobus Properties has various residential real estate offerings, from apartments to luxury lifestyle estates – whatever real estate investment you have in mind, we have the perfect solution. Visit www.mobusproperties.com today to find out more.
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