Why Buy Real Estate Investment
As the economy continues to evolve and the price of hard assets continue to rise, more and more people are wondering how to buy real estate investment.
And it’s for good reason because some economists are predicating that in the next 30 years what’s going to separate the ‘haves’ from the ‘have-nots’ will be real estate. It’s as if a line is being drawn in the sand. The lower income people of the future will be life long renter. The higher income people of the future will be homeowners who can pass on their generational wealth with real estate.
Simply put, buying investment real estate is a financial leap that helps secure a future that renting lacks.
Of course with any investment, there are some possible risks. Mortgage rates change, natural disasters happen, and there is always the possibility of selling at a loss if the market dips, but preparing for these outcomes can help.
Choosing the right type of home buyers insurance, staying on top of minor fixes, and creating a savings plan to set aside additional funds for the unexpected surprises, are a few precautions that you can make. Attending investment meeting in your area is another option that can help you meet people who know the market and how to navigate it properly. These precautions won’t eliminate the risks in buying, but planning ahead will give you the ability to finance these obstacles should they arise.
As with any investment, it is important to thoroughly investigate your own financial situation to determine if buying is the right option for you, preferably before heading off to a mortgage broker or another lender. Calculating your current monthly spending and what you can afford, can give you a basic understanding of your current financial situation while calculating the upfront costs of purchasing an investment and creating a detailed budget can give you an idea of what a financial future could look like. Including every expense imaginable, no matter how trivial they may sound, will make your calculations more accurate. Allowing wiggle room for inflation is important in these calculations as they can give you a better glimpse into what a future budget may look like.
When in doubt, consulting a credit counsellor to help create an action plan to improve your finances or credit score is a great option.
Once you’ve given yourself the green light to pursue buying, you can begin your hunt for investment properties.
Here’s how to buy real estate investment:
Before shopping for your first real estate investment, it’s important to make an appointment with your mortgage broker to determine whether or not you qualify for a mortgage and how much you can afford. While getting pre-approved is the first step, it’s not a guarantee that the final mortgage will be approved by your bank or other lenders. They will need to investigate the property beforehand to determine whether the investment is too high of a risk or not. Bring your employers contact information, proof of address, government issued ID’s, proof of income, proof of downpayment, proof of any other savings and investments, and details concerning any other financial obligations/debts, with you when you meet with your mortgage broker. It’s also important to take a look at your credit score beforehand so you can get a firm understanding about your own financial past.
Find the Right Investment Property
Shopping for an investment property is different than shopping for a home for yourself. The home doesn’t have to be perfect or whatever your ideal of the dream house would be. Instead, make should you shop for something that is reasonable. Look for something that’s nice (so that good tenants will respect the space) but not luxurious. For example, if the property you’re considering doesn’t have a dish washer, that’s fine, as long as there is running water and functioning plumbing, your future tenants can manually wash their own dishes. Try not to get emotionally involved in the decision process. Remember, this is a large financial decision you’re making, so let logic and objectivism guide your decision-making process.
Choose a reputable inspector to help catch any problematic and costly fixes before buying. If there is a problem with the foundation, pipes, wiring, or even mold, you need to know beforehand, otherwise, you could be saddled with a house that requires care beyond your own capabilities. Protect yourself against these time consuming and costly repairs.
Make An Offer And Close
Read every contract before signing. It’s important to fully understand any conditions and clauses before taking on the legal responsibilities that come with the house. Your own clauses should be included in the offer, such as requests for appliances or fixtures, otherwise there may be a problem if legal action needs to be taken. Remember that an offer can be cancelled anytime before it’s accepted.
Buying an investment is a huge milestone. While the ordeal may seem out of reach, talking to a financial planner or a credit counsellor can help you get organized and prepared so you can enjoy the benefits that accompany homeownership. Contacting a real estate expert can bring you closer to your goals. If you’re wondering how to buy real estate investment and need help getting set on a path for success, reach out to the Titan Investment Real Estate team so you can start working with an investor focused real estate agent today.