Building a property is an excellent investment. If you have enough money, it will be a great alternative to have an investment in this form. Before you start planning a property investment, you must know the main rules. Therefore, you will achieve success in this investment.
Buy a property investment in your budget
Before you are investing on a property, you must know your budget. You can get the fund from your own nest egg or bank loan. If you are thinking to use a bank loan to fund this investment, you need to communicate with the bank. This communication will help you find out on how much money you can lend from the bank. Therefore, you can look for property within this budget.
Consider your current home loan
Some of you may wonder whether you need to pay off your home loan before starting the property investment or not. It is okay to start this investment when you still have a home loan to pay. However, you must avoid it if you still have large amount of loan to pay or if you are not comfortable with your debt level.
Consider the ongoing cost
When you are planning for your property investment, you must consider the ongoing cost such as, home insurance and maintenance. If you build a property from scratch, you must choose high quality material that is easy to maintain so that you can minimize repair and maintenance.
Shop for property in a growth area
To attract renters, you must find a property in a location in which there is high demand of rental accommodation. Some of the areas that you can consider are those near universities, transport, and schools.
Invest on liveable property not luxury property
When you are building a property investment, you must opt for building functional and liveable property. Building a luxury property cost too much money. In addition, it is not easy to let luxury property for rent. A functional and liveable property is more attractive for renter because it is more affordable.
Have the right insurance
The property insurance that you buy for your main property is not the same with your secondary or investment property. It is because the investment property is considered as a commercial property. As a result, you and your tenant will have sharing responsibility. For your property investment, you can opt for Building and Personal Property Coverage.
When you are applying for this insurance coverage, you may be offered with a particular package. However, the company will also provide a Building and Personal Property Coverage form. This form classifies what property that must be included in the coverage and property that is not included in the coverage. In addition, it also contains losses types that are covered, additional coverage, exclusions, and other things related to property insurance.
Having the right insurance can give you more advantages. That’s why it is important for you to fill in the Building and Personal Property Coverage form carefully. Filling this form with consideration will give you more peace of mind.