Property investment takes planning. Here are some steps to help you get started:
Start paying down your debt as soon as possible to establish a strong credit rating. This step is also important as the less debt you carry, the more real estate you can buy.
As your debt is paid down, start putting money aside for the down payment on your first property. Make this a habit and the next thing you know you‘ll have enough money to purchase your first home.
Start researching as much as you can about real estate. Important things to study include real estate investment, market trends, and up-and-coming neighbourhoods.
Find a Trusted Agent
Work with a trusted agent to find the best properties with the best potential for growth.
Find Your First Purchase
If you don’t already own your own home, once you’ve saved enough for your down payment, look for your own home. Choose a small, affordable home in an up-and-coming neighbourhood to help ensure you can sell it for more. It is best to put down at least 20% and find the best possible terms for your mortgage. It’s a good idea to only purchase a home with mortgage payments less than your current rent.
Continue to save so that you can look for your next property. This property will be rented, so make sure you are buying in an area that will provide you with enough rent to cover your full mortgage payments. That has to include all applicable taxes and home insurance. Don’t overlook fixer-uppers that you can upgrade with minimal investment to get more rent. Ideally, you will not just breakeven but also accumulate a few hundred dollars per month to put towards your next purchase. This money will also come in handy to cover maintenance costs.
Pay Down Your Mortgages
Your goal should always be to pay down your mortgages as soon as possible. If you pay off your mortgage or see a potential gain in selling your home, that is how you can begin to grow your real estate portfolio. Also, when you pay down your rental properties quickly, the rent becomes straight income and can be put toward your next investment.