You are guaranteed an excellent rate of return, tax advantages and can leverage real estate to help build your wealth – if you do your research properly, but it requires you to sometimes go against the grain.
First-time buyers sometimes face problems getting on the first step of the property ladder, and this can lead to people not wanting to participate in the property market at all. When you are starting out and have limited financial means it can be quite tough, but the sooner you get on the ladder, the sooner your equity grows and you can start duplicating.
With this in mind, reaching the next rung of the property ladder is not as easy as putting up a For Sale sign and waiting for buyers to make a too-good-to-be-true offer.
Do not fear debt. Most people are afraid of debt and leverage. However, smart debt can help increase your return and shorten the time it takes to get the return. Debt does increase your risk during a downturn, so every investor needs to know how much debt they are comfortable carrying.
If you wish to climb the property ladder this would require you to go against the grain. If your goal is to retire wealthy then you need to do the opposite of what everyone else is doing. Good investors sell when everyone is buying and buy when everyone else is selling. It can be difficult to maintain your confidence, so you will need to make sure you do enough research in order to make informed decisions at all times.
To climb the property ladder you will need to have a strategy and stick to it. Every investor should have their own strategy, figure out what works for you and what does not, be aware of the opportunities and note that good strategy does not have to be overly complicated as it is often the simple things that work. Strategies to consider include:
Sometimes the secret to getting the best property at the best rate and value is by timing the market. Many people wait until the market is low before buying. However, if you buy good stock and hold on to it for about 10 years or more, you should see some great capital gains, regardless of the fluctuating market.
A good choice for potential investors to focus on is purchasing ‘cosmetically tired’ rather than ‘structurally tired’ properties. Structural work is often where problems occur and budgets blow out. Some of the simplest ways to renovate a cosmetically tired home include painting, polishing floorboards, converting a garage into a bedroom, replacing kitchen doors or re-enamelling tiles and baths. This will cost a lot less than restructuring.
Note that entering the property market is not easy, but it sure is worth it in the long run. So, if you are ready to enter this market, go for it now.
Call or email PropertyFox today as we would be more than happy to be a part of your climbing the property ladder journey.
Property Fox is South Africa’s leading smart real estate agent: Striving to do things differently and providing excellent customer service through sharing information openly and honestly to ensure their clients are always in the know.
PropertyFox, which charges only 1.5% in commission or a minimum of R35,000 (whichever is higher) – has saved customers up to 80% in fees.