How do property investors exist in your imagination? For me, I think of the Monopoly Man, mustachioed and top-hatted, I think of the well-coiffed casts of American television shows decked out in their chinos and stilettos, I think of names like Hilton, Justin Hemmes and even the Trumps.
In our heads real estate investors are an exclusive, unattainable bunch that do not represent the world as we see it, put simply, in our mind real estate investors are mainly rich, mainly white, and mainly male. The reality could not be more different.
The truth of the matter is that becoming a real estate investor has become more and more accessible for people from all walks of life. It’s a great way to supplement your income and invest in your future.
To learn how to become a successful property investor follow these three simple steps.
It may sound intuitive to say but when you make an investment you have to think of it as just that: an investment. Before you make an investment you need to think long-term and figure out how the investment you make today will factor into your life five, ten, twenty years down the line.
Ask yourself where you see yourself in that amount of time. Do you see yourself in a job that you love and find deeply fulfilling? Do you see yourself travelling the world? Do you want to be retired and have freedom to spend time with your family, children, grandchildren?
Start by establishing what you want out of your life down the line and then ask yourself what sort of investment is needed to get to that end goal. Property is a worthwhile and concrete way to invest in your community and your financial future, however, once you’ve made your decision you need to decide what sort of investment you want to make.
Are you looking to fix and flip a property, buy a property you might like to move into one day, are you looking to move into a property and rent out the spare bedrooms? It’s all about choosing an investment strategy that will help you achieve your goals.
Make Your Mark In The Right Market
Once you’ve picked your own investment strategies you need to think about where you’d like to start investing. Property markets can be fickle and are constantly changing and require monitoring.
You’re rarely lucky enough to find a ‘goldilocks’ market that will deliver every single time and never let you down, however, as a general rule of thumb, if consistent returns and cash flow is your biggest priority look for small towns on the rise but if you’re looking to make a splash and buy a property that will appreciate in value overtime stick to booming major cities.
Remember: location, location, location! When you’re making an investment you have to think about the neighbourhood you’re investing in because more than just a property, you’re investing in the livability of that area.
The neighbourhood you invest in will likely be the largest determining factor for the potential success of your property. Think about it, when you’re looking to move you’d start by searching in a specific neighbourhood which makes location the key factor which will determine the type of tenants you’ll be able to attract. If it’s a university town you’ll attract students.
If you’re looking to invest in a family home you’ll attract more interest from tenants if your property is in the catchment area for great local schools.
Other areas to look into include population growth, the job market possibilities, the average wages of residents, the occupancy rates, the purchase price to rent ratio and any infrastructure developments that could make the area more or less attractive. Make sure you do your research, people!
Protect Your Own Interests
If you’re making the leap to become a real estate investor then it’s important to make sure that you’re protecting your own interests.
What does this mean? Basically, when you make any major financial decisions you have to make sure you’ve got yourself covered so you’re not setting yourself up for a financial loss.
Make sure you have the correct insurance, that you’ve researched any loans or mortgages you’ve taken out to make sure they are the best suited to your individual needs. You should also consult a lawyer.
The Legal Vision commercial law team has experience giving advice in a wide range of commercial real estate issues making them well-equipped to help with tenancy disputes, property and leasing agreements or to protect your interests if you invest in commercial real estate.
Keep educating yourself and consider becoming a property investor today!