Many people like to invest in real estate because it’s a tangible investment, unlike stocks and bonds. You can’t see or touch a stock (you could probably see or touch a stock certificate, but it’s not really the same thing) like you can see or touch a house or an apartment. And if the real estate you’ve bought is in a good area, chances are that prices are just going to keep going up. Yes, it is possible to mistakenly invest in an area where the prices are going down. But if you keep certain things in mind, you will be able to avoid making this mistake. Here are some things to consider when investing in real estate:
- Budget: Make sure the property you are buying is within your budget. If you’re paying up front, then you will need to have all that money in the bank. If you’re getting a mortgage, this should not strain your monthly budget to breaking.
- Location: This is one of the most important things to consider when buying real estate. The better the neighborhood, the higher the prices. And in a good neighborhood, prices are also likely to keep going up. So if you need to sell the property in the future, you will be able to do so at a profit. Research the neighborhood before you buy.
- State of the Property: Has the property been well-maintained? If not, are you really up for all the repairs you might have to do, including buying a new boiler, repairing the HVAC system, getting a new stove, redoing the floors etc.? A property that’s not well-maintained will be cheaper to buy but you might end up paying the same amount in the end.
- Home vs. Investment: If you’re buying the property as a home, consider how far it is from your place of work, from groceries, from good schools (if you have kids) and from shopping/dining. If the property is an investment which you will be renting out, consider the neighborhood in general and the rent you’re likely to get in that area.
- Second Home: Another possibility is that you’re buying the property as a second/vacation home, in which case you should consider whether that’s really a place you would like to go on weekends or over the summer. Plus, is it going to be feasible to maintain that second home and keep it clean and well-stocked? These are just a few things to keep in mind.
Contact us for more great tips to help you make the right decision when buying real estate.