Real estate investing may not be that easy as it looks out to be. It doesn’t make any difference whether you stay in the US, or in the UK, or any other part of the world, the key parameter remains the same. There could lay a difference on how it is priced, but the underlying investment criteria don’t vary a lot.
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Consider your age
Many young people have been showing strong interest lately in real estate investments. If you ask me, personally, I am not too convinced about this idea. Younger ones should avoid buying a house purely as investments. If you do that then you are playing too safely, remember, when you are young, put your money onto something that might bring you money at a much faster rate. Real estate investments at the age of 35 will make you lazy. You may make money, but in reality you lose your creativity.
Though, you may certainly buy a home to stay. It’s a better option to have your own home, than paying rent each month. What I intend to elaborate is the fact that don’t buy properties with an aim to make investments when you are young.
Do you have enough money?
Money is the key here. Not many like to buy properties by paying cash on the spot, however, if you do that then it’s admirable. The real problem crops up when you buy properties on loan. You must ask a lot of questions to yourself, whether you would be able to pay in the longer run. How financially stable, you are? Can you conjure money, when your back is against the wall?
If you know that you might encounter problems while repaying loans, don’t push into buying real estate properties.
Real estate investing is about taxes. There is the salaried class who want to buy homes on home loans and avoid taxes. But, on the other hand, you should also know that if you get a real estate property and give it on rent, your income will be taxed. You must also find out what is the minimum period above which you will not have to pay taxes on real estate investments in your country.
What if you are fickle minded
Real estate business is not for the impatient lot. Those who like to change their decision should stay out of real estate investments. These investments involve patience, and your ability to wait before you choose your options. Real estate investors also have a broader perspective in their approach. They visualize their profit from investments, even before they invest. They know their cards, and also know how to use them.
If you don’t fit in the criteria, avoid real estate and put your money on any debt instruments.
Author - I am Rajiv Sighamony. Check the guide on how to buy $1 million homes for just $1,995.