1. Know your budget
The funds needed to invest in a real estate is not a small figure, therefore it is important to be clear of the amount of cash you have in hand. Another way to set a realistic budget is to enquire the amount of loan you can get from a bank.
2. Do not underestimate the hidden costs
Make sure your budget covers interest rate, insurance and home repair costs.
3. Invest in areas with high potential
The price of a property located in an area with convenient transportation will definitely increase with time. Areas that are nearing to schools, universities and landmarks are considered to be of high potential as well.
4. Set a realistic investment goal
Are you purchasing a real estate to earn money or for long term usage? When the economy is good, it is easy to sell it off. However, when the economy is sliding into a depression, it might take a long time to find a buyer. Hence, find out your goal of owning a real estate before purchasing one.
5. Do the house renovation yourself
If you want to save money from paying high renovation cost, do the renovation yourself.
6. Put importance in practicality
When you are choosing a real estate, always opt for the one that is practical and with high potential to sell or rent out. Never go for houses that offer good appearance only.
7. Never invest on a real estate just for the view
Having a good view is never a bad thing, unless it takes 3 hours to get to the place. Think thoroughly when you are tempted to invest in a place that offers only good view.
8. The rent received needs to be more than the installment loan
Before investing in a house, make sure that the rent you can receive is more than the monthly installment you are required to pay back to the bank, or else you might land yourself into an unneeded financial crisis.
Is the house you are living in right now fully paid off? Be very aware of your liabilities, including all loans and credit card spending. This is to ensure that you will have sufficient cash in hand, and you will be able to make all ends meet.
10. Inspect the property before purchasing
Always check the house and read the reports before signing the contract. This must be done to avoid repairs in the future. Also, read the contract carefully for fines on termination.