Here is a 10 simple steps plan that anyone can use to invest in property. Let’s get started;
Step #1: Find your market
The first step you need to take is find your market which is your target area, the geographical location, of where you plan to buy an investment property. The best location of an investment property is within a 10-20 km radius from your home. The closer you are to your investment property, the better. This is because you can immediately reach the venue if there are any problems on your investment property.
How to choose your market? This is depending on the amount of returns (Return on Investment – ROI) you want to make, when you sell or rent out the property. Additionally, your ROI will be effected by a number of factors, such as current market values of the existing properties in the area, upcoming development plan for the area, neighborhood, crime rates, so on and so forth.
Visit the area in day and at night. During the day, you will find out there are a few abandoned houses or commercial buildings may appear like an opportunity and waiting for you to invest in. However, at night, you may find out that these vacant houses and building may be a haven for criminal activity or a camp for homeless people. Talk to the people that live in the area, to get a clearer picture for what is going on there.
Step #2: Choose the type of investment property
What type of investment property that you would like to invest in? Landed house, Apartment, Condominium, Vacant Land or Commercial Property?
How would you like to buy that property? Buy it by cash or by bank loan? Well, on this questions, it is advisable to buy an investment property by bank loan as it save you a lot of money while, also, getting control of the property. (Click here to read: Buying A Property By Taking Loans vs Cash)
Step #3: Decide the type of investment property
In order to get the good returns while affordable for you, you must do the study and compare each type of investment properties (Landed house, Apartment, Condominium, Vacant Land or Commercial Property), its rental yield, appreciation, capital gains from flipping. Here are simple guides for you;
(a) Search online for “___________ ________ tax assessor” and “_______ _____ tax clerk” and “______ ______ property appraiser”. Fill in the first blank with the country which the property is located. Fill in the second blank with the state.
For instance, if you are searching for an investment property in – Country: Malaysia, State: Pulau Pinang, search for “Malaysia Country, Pulau Pinang tax assessor” or “Malaysia Country, Pulau Pinang tax clerk” or “Malaysia Country, Pulau Pinang property appraiser“.
(b) Research the area. Find out the recent transaction prices of the properties in the area, how long they’ve been on the market, annual taxes, appraised values and etc.
(c) Study the area. Determine the comparable market values of real estate. Become an expert and this will enable you to predict its market trends so you can understand where to buy and when is the appropriate time to buy; where to sell and when is the appropriate time to sell.
Step #4: Develop your investment plan
Firstly, What kind of investment strategy that you prefer?Buy and rent for profit or buy, fix and resale for profit? (Click here to read: Make A Wise Property Investment In 3 Ways. In this article, it will show and explain the 3 property investment strategies, to figure out which one is suits your financial status)
Secondly, How are you going to find the money? We are getting to that. Once you have an action plan, then finding the money becomes much more easier.
Step #5: Establish a back-up plan
Set up a plan B in the event that everything goes wrong on existing plan.
Making a backup plan will lessen any worries you have, enabling you to move forwards, to take action, to make things happen. Action eliminates fear.
Step #6: Determine your exit strategy
In order to know where you are going, first decide where you want to end up. What is your final goal? How do you plan to exit this deal with a awesome profit, and with all parties (buyers, sellers, investors) satisfied and happy.
Step #7: Present your plan to your mentor
In property investment field, having a mentor is essential, especially if you want to do something big and be succeed in this field. Once you come out your investment plan, present it to your mentor, ask his/her advice and edit your investment plan is necessary.
Step #8: Execute your plan
No more hesitation, take action now. Start switching your plan into action. Action eliminates fear
Step #9: Get people competing to buy your property
When selling or renting your investment property, gather a crowd as many as you can by scheduling a specific time for discussion, negotiation and property visitation. It is advisable to schedule an open house on Sunday, as everyone is day off in this day.
Step #10: Put your exit strategy into motion
Collect rents. Resale the property. Keep all the records such as documentations and receipts. Don’t forget to photocopy all the records for backup.
Everyone can almost get into property investment field anytime, but, not everyone can be succeed. Knowledge is much more important, regardless of you have how many cash on hand. Remember, only start your first investment, when you’re mindset is prepared and your brain is full of related knowledge. Best of luck on your property investment journey!