There is no magic formula when it comes to successful home property investment. However, you can get inspiration from the best practices of seasoned and successful property investors and come up with your set of ground rules. Here is a list of 10 things that you can do to make a cash cow out of your first home property investment.
Assess the outcome of your investment options
Perform cost-benefit analysis before making any investment decision. For instance, before you perform any renovation project, it is critical that you assess whether the added value is sufficient enough to cover the renovation or not. Look at latest market trends and indicators and consult real estate professionals. Make sure that you are up to speed with regards to the development in the real estate market.
Approach the task as a team
For property investors, the oft-repeated cliché – two heads are better than one – is most significant. In order to make informed investment choices, it is extremely important that you adequately consider several variables. However, you cannot be expected to have the technical expertise and skill set to assess all of these variables that affect your business decision. You will have to rely on the expert opinion and professional advice of other persons. As such, it is best that you consult other professionals and come up with a "team" position in order to increase your chances of success as a property investor.
Experience is your best teacher
No amount of study and training can turn you into a full-fledged and seasoned property investor. You have to experience the entire process in order to get the right "feel" of being a property investor. As you log in the hours and increase the number of completed real estate deals, you will be able to identify your comfort zone and establish your own rules for a successful property investment venture.
Allocate 25% buffer to your budget
Always add 25% to your property investment budget. In assessing your investment options, it is wise that you add 25% to your estimated project cost. For instance, if your home improvement contractor quotes the budget for your proposed home renovation project, you must add 25% to the amount as a buffer when performing a cost-benefit analysis.
Home remodeling is like peeling an onion
Your home property can be compared to an onion. As your home renovation project becomes more extensive, you tend to peel more layers of your property and more problems become apparent. This means a higher budgetary requirement can significantly impact on the final benefit that you gain from such home improvement projects.
Carefully weigh your investment options
You must be able to weigh your options while taking into account your investment objectives and priorities. For instance, if you own a 3-storey property with a basement, you may consider as one of your options renting out a few spaces of the property. Renting a portion of your property is a logical and attractive option if you are exploring your alternatives so that you end up owning a mortgage-free property.
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