If you are going to take on the responsibility of investing in property you must be prepared. Property should ideally be a long-term investment, so buyers should consider their future plans and where they see themselves over the next five to possibly 10 years.
Owning a home is a milestone that most people aspire to; it is also an opportunity towards growing personal wealth and owning an asset that appreciates in value over time. Nevertheless, the question commonly asked by potential investors is when is it the right time is to invest in a property? So, if you are wondering whether you are ready to get started in property investment, here are a few things you might need to be more informed about.
Make sure that your personal finances are in order. While it is not an easy process, putting money aside is an important element in preparing to buy a home. Look at your personal spending to know if you are ready to handle the costs. When getting ready to buy property, most potential buyers are reliant on financial institutions for finance, which means their home buying capability is subject to bond approval.
Remember that getting your finances in order is one of the most important steps to getting closer to affording the property of your dreams. Your chances of bond approval will be based on the level of affordability you are able to show the bank — this will be based on your level of disposable income and your debt-to-income ratio.
Make sure that you have done the necessary research towards understanding the process of buying a property. Research plays a fundamental part in your preparation to buying. Investigate the property market and see if now is a good time to start investing in it. Also find out as much as you as can about the area where you want to buy. If you are looking at buying to let, you would need to look at researching your competition which includes the type of units they rent out, their going rates and the market you want to reach.
Because purchasing a home will have a massive impact on your financial well-being in the long-term, it is vital to not rush into the decision. Timing is an important factor when it comes to home-owning readiness. Ideally, you need to be ready to buy, but should also be able to wait if required. Also give yourself enough time to research and find the right property, as you do not want to be caught in a situation where you have started too early and still have six months left on your lease agreement.
Often buyers make an emotional investment in a property before they are financially ready to start the process.
Do you believe that you are good at negotiating purchasing prices, renovating properties for a quick turnaround of the investment — or are you a patient investor who is willing to tie up their money for many years to see if the property value appreciates? Note that your capabilities will determine the type of real estate investor you can be, as there are different ways to do it.
While buying your first property is a beautiful experience it won’t always be easy. You need to be realistic when thinking about investing in property. Understanding the commitment, effort, time and most importantly, your financial affordability, are the first steps towards being ready.
While there are often challenges that you will face along the journey, the end result is an appreciating asset that you get to call your own. Should this be an avenue you want to take for your financial future, make sure you obtain some sound advice to ensure you make a well-informed decision.
At PropertyFox we would like to make your property buying or selling experience as smooth sailing as possible. Contact us today and we will take it from there.
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