It has always been said that real estate is an excellent investment and that anyone who can purchase a property (or more than one, ideally) should do. Yet this is a very sweeping statement, and it’s one that isn’t universally agreed by those who have other ideas about how to make money (investing in stocks and shares is one thought, starting a business is another, for example).
However, for those who are interested in property and who have the funds available to buy a property (or more than one), it could be exactly the path they are thinking of going down. Is it the right path, though? Just because you can invest in property doesn’t necessarily mean you should. Ask yourself these questions to make sure it’s the right kind of investment for you.
What Will You Do With The Property?
There are two main choices when it comes to buying property and what you will do with it afterward. The first is that you’ll buy it and then live in it. This is what most people strive to do, and it is, for the most part, a good investment. When you are ready to retire, you can downsize your property and buy a smaller house or apartment with no mortgage, living off the rest of the equity you have built up.
Alternatively, you can buy property to rent it out. This is a riskier proposition; what would happen if you can’t find tenants and have to pay the mortgage without any rent coming in? What would happen if you had tenants, but they stopped paying you? Can you afford the maintenance? Although there is risk attached to this idea, the rewards are bigger, and you’ll receive an ongoing monthly income. Which is the best option for you?
How Much Can You Spend?
Buying a property is a great idea, as we’ve said, but it’s also an expensive thing to do, and you will need to have a budget in mind. How much can you afford to spend on a property (and not just the down payment and mortgage either; if you’re buying an older property that needs work, how much will that work cost? If you’re planning to become a landlord, what do you need to put in place to make that happen?)? This is a crucial question to answer before you start looking around at somewhere to buy. Unless you know for sure how much you can afford, you might be disappointed when you find the ideal property only to discover you can’t purchase it.
If you can’t buy something close by, perhaps think about buying something abroad. If you find a country that has less expensive property than your own, this could be an ideal first step into property investment. Kenya, for example, is a great choice – the property there is priced well, and it sells quickly. The best thing to do if this appeals to you is to look at the range of properties currently available on property sites like Kenya Property Centre. Here you can find houses, apartments, and even land for sale in one place, making the process of property hunting much easier and faster.
What Are Your Other Options?
Real estate is one type of investment, but there are many more. Make sure you have checked them all out and determined whether or not any of them would work out better for you than property would. The idea of owning a portfolio of properties is exciting and would feel like a great achievement, but don’t let that get in the way of what makes the most sense for you.
If buying property would put you in a difficult financial position, it might be better to invest your money elsewhere – or simply save it – until you’re in a better position to move forward.
Nickida
Nickida is a first-generation Trinidadian American wife and mother of four. She enjoys sharing recipes from her childhood growing up in Trinidad with her readers. Nickida has a son with Autism and shares posts around traveling with a child with special needs to help other families like her own. She loves television, movies and is a true 80's baby.
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