Property investment are lucrative, but you have a lot to deal with. Yes, we’re talking about the risks associated with the market. Even if you enter the market when it’s performing well, you can’t expect it to remain the same.
You’ll come across bad tenants, price changes, recessions, and whatnot. There’s no guarantee that you’ll make amount X if you enter the market in a given time. As an investor, especially a beginner, you should only invest the amount you’re ready to lose.
This doesn’t mean you should not enter the market if you don’t have a billion dollars. To be successful with what you have, you should get your planning and strategic thinking right. And you should also be mentally prepared.
However, investing in property is one of the best ways to make money for anyone with financial goals. We’ve compiled some of the best property investment tips for you, so read ahead!
1. Know the basics first
You must know the basics of the market, and you must have a plan. Think about why you want to invest in properties. Find the type of property that best suits beginners, and find ways to purchase them.
Properties vary in price according to their geographical location. Have a budget so you can shortlist your choices. When starting, you shouldn’t risk more than you can afford. It’s wise to place safe bets and start small before going big.
2. Don’t move without a strategy
Many beginners quit investing because they are too eager to make money fast. While wealth accumulation is a reasonable goal, it shouldn’t blind your vision.
If you want to stay in the game, you can’t make a move based on your emotions. You must use strategies depending on the property, budget, time frame, and profit profile.
3. Be aware of the risks
Any business has risks. It is the same with the real estate industry. You have no way out of it because it’s what the market is about. If it were easy, everyone would consider doing it.
Common risks associated with property investment are market price fluctuations, unreliable tenants, property damages, and rushed decision-making. Understanding how these risks beforehand will get you ready to face them.
4. Know your target market
Sometimes, what you think you know is not always right. This isn’t about you or your interest. Walk in your target customer’s shoes and understand their pain points. Study your target market thoroughly, know what they want, and provide the solution.
You should look at property investment for its potential for wealth accumulation. We’re doing numbers here, so look for ways to make the property more profit-yielding. And make it enticing for the target market.
5. This isn’t a one-day game
Just because you have bought a piece of land or building doesn’t mean all is well. This is precisely when your investment journey starts.
You have to think of a way to get revenue from your property. It could be offering houses for rent, or you can consider renovating them to attract tourists to areas such as Nuwara Eliya, Kandy, or Galle.
This is a long-term game. If you are doing this for quick bucks, you are better off doing something else.
It’s not an easy choice to venture into real estate investment. But if you’ve decided to do it, know that you’ve made a decision that has long-term impacts. This will only work if you know the investment game.
Before looking for properties, it’s important to dig into the market and learn how to tackle them. Study competitors, and talk to friends who might know a thing or two about property investment.
These tips might not help you tackle the overall game, but definitely, they’ll be helpful to kickstart your journey.
Want to improve your knowledge about property investment? Here are some articles for you:
- Central Bank Slashes Interest Rates – Is It the Right Time for Property Purchase?
- A Sellers’ Guide – Things You Should Know Before Selling Your Property in Sri Lanka