Buying an investment property

Many people use property investment as a means of planning for their future. Not only does it generate an income, but there is also a gain to be made when the property is eventually sold on. It is a good idea to view property investment as a medium to long-term commitment.

There are many factors to be considered when investing in property. It is not a decision to be rushed into. It is a good idea to study various areas to find out what the expected rental income may be for the type of property that you have in mind. This will also give you an idea of the demand for rental properties within that area.

Comparing rental incomes against the purchase price may help you establish whether or not there is a profit to be made with regards to your investment. Investigating the viability of any investment can help to ensure that there are no surprises in relation to what you can realistically expect to earn. Double check all your calculations and make yourself aware of where you may be liable for extra costs such as income tax, professional fees etc. Property investment can be very worthwhile once it has been researched properly and you are sure that you have adequate funds to support the investment.

Deciding on the type of tenant that you wish to have in your property is also to be considered. This will tie in to a degree with deciding the area in which to purchase.

Young professional couples will look to rent in an area that has a good address and is accessible to their workplace. On the other hand if you are purchasing in order to rent your property to students it is advisable to purchase within easy access to the college.

As with all property purchases employing a structural surveyor to visit the property is definitely within your best interests. This will highlight any defects to the property and the costs of repairing same. Instructing an independent valuer is also money well spent. They can give you a professional opinion of the rental income you would be likely to generate from the property and advise you of any other developments within the area, which may affect the value of your investment.

It is important to approach this decision with a business mind. Rushing into things may leave you unequipped to deal with problems should they arise. Having excess funds behind you is always important in the event of any situation you could not have planned for. Similarly, spending too much money on decorating the property can be a bad decision. There is no benefit to decorating the property to the highest standard. The important thing is to maintain it and to make it presentable to prospective tenants.

Since changes in legislation have brought back investors into the market it is a road that many of us would now consider. The are many tax incentives in investing in property, and when approached in a logical and informative manner it can be quite rewarding financially. Not only this but it also provides the opportunity to build a portfolio of properties be it small or large once you have equity in existing properties.

Of course purchasing a property for investment is not in everybody's best interest.

Many people would find the responsibility and the initial costs too much of a burden to carry. It may not suit their situation and they may not be able to maintain the property in a fashion that would make it desirable from a tenant's point of view.

As a relatively long-term venture property investors should buy with their eyes wide open. Markets can change drastically from year to year, as can tax implications, and in this respect you must be able to weather the storm.

Before making the jump talk to people that you know who have done this before you and ask them of their experiences. Evaluate the real worth of the profit to be made by you in terms of money into your pocket and what you can expect to appreciate in relation to the value of your property. There are no guarantees with any investments but there are ways of making sure that you choose the right one for you.