Investment Properties
Investment properties can take virtually any form, be of any size and require almost any amount of financial investment. It is possible to purchase rental-housing properties for “no money down” full finance and use the rents to pay the costs of the financing, leaving you the owner, increasing equity in the deal. Other types of investment properties provide very long term investment opportunities – for example commercial properties leased by one or more major companies, warehousing and storage units. Some people love the thrill of pulling off a major redevelopment deal, selling a hundred plus houses in a new urban sub-division, while others prefer buying an apartment block which sometimes offers the owners a place to stay and a financial return on the investment through renting out other units.
The phrase “no money down” has become a popular one in real estate investment properties in recent years. The term can mean using the equity in one property to finance another; arranging finance to cover 100% of the asking price of the property or arranging a deal where the previous owner of the property concerned leaves finance in the property in the form of a first or second mortgage. Regardless of the way investment properties are acquired, there are some points all potential investors should be aware of before investing any time or money in them.
Always make sure you understand the costs of all the charges associated with any finance arranged to buy investment properties. This includes booking fees, accounting fees, interest charges, penalty interest rates and professional fees.
Regardless of the type of investment properties you are interested in make sure that a thorough search is done of the property title.
Unless you are a lawyer who specializes in property transactions, make sure every agreement and contract you are signing in relation to your purchase has been completely vetted by an independent professional.
Make sure that when you are working out whether or not your proposed investment offers a decent rate of return, that you include the charges of all costs associated with the sale and/or purchase, including interest charges, professional fees, and any other charges over and above the property price.
Research, research and then research again. Check with local councils to make sure a motorway development or sewage plant isn’t scheduled for the area within the next ten years. Triple check title searches to ensure that there are no liens or caveats on the property. If possible talk to neighbors and people in the area you are buying into to determine if the area has growth potential or if a major employer in the area is closing down.
Investment properties offer a great return on your initial investment provided you know what you are doing. The advice you need can be bought though, so don’t be put off if you have little experience in this area of investment, just expect to pay a bit more for some professional advice.