Becoming a Property Owner

People are learning that one of the best investments that they can make is in real property. Picking out the best land for the money comes with many decisions that you shouldn’t make in haste. Becoming a property owner is one way to increase your net worth, but it’s also easy to make a mistake if you are not careful. This is especially true of island property such as land and other real properties in Sri Lanka. Whether it’s apartments, houses, commercial property or pure plots of land, you need to make sure that you’re picking the right investment for the right reasons.

What types of investment property should you look at?

The type of property that you should look at is the type that appeals to you and your needs. There is a big difference between looking for a new beachfront home for yourself or to rent, and looking for a commercial property for businesses to rent out and use. If you are simply looking for a good investment, then you need to figure out how you plan to utilize the property you pick to your advantage. Purchasing property is not a turnkey operation. You will have to put in some legwork to make that investment pay off for you.

Types of investment properties

There are many types of income producing properties.

Office property – You can rent office property out to one or multiple businesses. There is some extra investment needed to make the building ready for office use, but as long as you can keep the offices full, there is always rental income.

Retail property – Retail covers stores. These can include single stores, strip malls and large shopping centers. Attracting retailers depends a lot on location and local economy. But the payoff can be great. Sometimes, taking a chance on retail location can turn into a major profit for you as well as for the local economy.

Industrial property – Industrial businesses always need a base of operations. Sometimes it is a warehouse, but it can also include large manufacturing operations. With such properties, you take some of the responsibility associated with some of the hazards inherent in the industry that moves in.

Residential property – Many different types of properties fall under the category of residential. These include single-family homes, apartment buildings and anywhere else that can house a family. Tenants pay rent, but upkeep of the property is required as well. After some time, you can hire property managers for such places. You can set up rooms to rent within your flats, but you must deal with what comes along with people living day-to-day life in your property.

Land – Buying land offers the highest amount of potential. Since it’s a plot of land, there’s almost an unlimited amount of things that you can do with it. You can flip the land, build on it, rent it out to others or whatever else comes to mind. Land comes with many caveats however. Much of what you can do depends on zoning and getting the proper permits and licensing.

Some property types can encompass multiple categories. You can have a building with commercial space on the ground floor, but residential space on the upper floors. Each type of property comes with its own pros and cons. You cannot treat them all the same, so it’s important to learn some of the ins and outs of the type of property that most appeals to you.

What to consider when looking for property

Budget – Your budget will dictate where you can and cannot go. You may want to look for property slightly above your budget if you think there is some room for negotiation. Ideally, you should start with the budget you need for the property that you want. Your budget is the thing that should keep your goals realistic. If you cannot afford a property, or if you believe you won’t get a good return for the investment, then search elsewhere.
Canvas the market – You may want property that simply is not available. That’s not to say it won’t be available in the future. You could save yourself some time by checking the market to see what’s there and how much certain properties are going for. You need to know what is available before you can make a final decision on what you want, especially if you are looking in a specific area.
Location – One of the most important aspects of purchasing property is where that property is situated. Location is important no matter what you may consider the property for. Assess your needs for the property. Do you plan to rent it out? Then you likely want a location where there are people looking for a home. You wouldn’t want a place where there aren’t people actively seeking accommodations. Is it a commercial property? Then you will want to scout places where people are looking to do business. If it’s a home for yourself, then your location has a lot to do with your own personal preference.

Scout the areas as thoroughly as you possibly can. You shouldn’t just look at the area that interests you; you have to look at the places around it that may affect it. What are the surrounding property values? How are the neighborhoods? Look for trends such as population growth and where certain industries are mostly located. Location is more than the immediate area, it’s the surrounding areas as well.

Another thing you may want to consider is to buy property as a group. This can help with budget concerns, but can create problems later on if the group is not a tightknit one. If you do buy as a group, make sure everybody is on the same page from the start. You may also want to consider land and properties with problems that you do not mind. Sometimes you will find property that requires work. This is not as bad as many people think, especially if they know that they can get the work done. This will help lower the price of the property to meet your budget, and also gives you more negotiating room.

Obey the laws of the land

Sri Lanka has many of its own regulations regarding the purchase of land. Locals will have less trouble than foreigners and expats. But that doesn’t mean that owning or leasing land in the area is impossible for foreigners. No matter where you may purchase property, one golden rule that you should abide by is to know the local laws. Many people have bright hopes when it comes to buying land, only to find out that some law or another will prevent the sale or cause the property to cost more than it’s worth. Always know what a property purchase entails before starting to go through with the process.

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