Residential Property Investment Tips

investment-advice 2Making a residential property investment is one of the biggest purchases you will ever make in your life. Owning a home is no easy-peesy deal. It takes a lot of hard work and not to mention financial resources to get one. That is unless you’ve won the lottery or you happen to be a multi-millionaire of some sort. Regardless, you will have to make sure that you make the right calls and get the best deals. We all want to get the best bang for our buck right? How do you do that? We’ve got some tips for you!

  • Buy low and sell high. This is the rule that investors who plan to lease out or to resell properties aim for and that should likewise apply to you even if you don’t have any plans on selling the home in the near future. You never know for sure and it would be best to sell something with a return than with a loss right?
  • Know what to look for to initiate a bargain. Sellers and agents will want to sell as high as possible but as a buyer you want to get it at a lower price. Not everyone is open to negotiation so you have to know who to target for a bargaining chip. Your best bet will have to be either properties that have been in the market for long or those that want to sell quickly. They are far more open to negotiations than others.
  • Know the neighborhood. This is not merely for purposes of acquaintanceship or location assessment but also as a form of research. Knowing the true value of a home includes having to know the worth of properties surrounding it.
  • Always set a budget for yourself. You cannot risk going overboard. Remember that there is more to your expenses than the price tag. There are other hidden costs that you will have to shoulder such as but are not limited to professional fees, survey and examination fees, taxes and other legal costs.
  • Always have ongoing costs computed. Many residential property investment buyers fail to consider this and suffer in the process. Such costs pertaining to maintenance and repairs do not surface unless you ask or have the asset checked. Some properties may be priced low at the onset but come with staggering ongoing expenses that will cripple you so check and do your research first.

Residential Property Investment Myths

Real estate residential property investment is nothing new. People go into it either for personal use or business reasons, both equally important and a gamble. One puts a significant amount of their hard earned resources in the hopes of ripping benefits from the asset either by using it themselves or having it leased or sold to garner monetary returns.

Unfortunately, investing in residential assets is equally riddled with myths and misconceptions just like any other type of investment out there. This can be a huge pain because people never get their facts straight and that can cost them. To help everyone on this, we’ve come up with a list of the said myths. Let’s debunk them one by one.

Myth: “The asset’s value appreciates overtime.”

Fact: Not all the time. There are many factors that lead to the appreciation of a residential property. Plus, their various combinations can lead to different and very varied results. Factors like location, accessibility, safety and security, proximity to significant establishments and employment are only some. You need to research. Furthermore, don’t get us started regarding repairs, maintenance and upgrades. If you know how to handle these investments and if you hold ones that have the potential then yes value can go up but this is not guaranteed to happen every single time.

real estate residential investmentMyth: “Upgrades create more value.”

Fact: If you plan to rent out and sell for income purposes or even think of selling the home you are currently living in today in the future should the need arise, the thought of upgrades can come across your mind. Do they add value? Yes but it depends. Not every expense can be capitalized and not all upgrades can bring the price tag up. Sometimes you might even find yourself spending for an upgrade that doesn’t really add much and ends up more costly than it is useful. To avoid that, it is best to call in the pros to the table. You need guidance and you need someone with the expert knowledge to tell you whether the upgrades you are planning are feasible for the asset’s structure and feasible value and cost-wise.

Myth: “Location is all there is to it.”

Fact: In a residential property investment, a lot of factors come into play. As mentioned earlier we have location, accessibility, safety and security, proximity to significant establishments and employment to name a few. In other words “location” is only one of them. It is an important one but should not be your sole target. Think about it this way. A home that’s close to schools, malls, offices and transportation hubs may sound great but what if it’s flood prone? Would it still be great and valuable? No.

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