7 easy steps for new real estate investors: How to buy rental property
You wonder how to make money through real estate investments? And so, you’re curious to know what’s the best type of real estate investing strategies out there? Simple. A rental property strategy is a good start. Yes. It doesn’t matter if they’re traditional rentals or Airbnb rentals. Both are lucrative if you’re looking forward to making money in both short term and long term. Notwithstanding, if you’re interested in real investing business but you have no such experience of having invested in one, the best thing you could do right now is to ask yourself these questions:
- a) How to start out?
- b) As a new real estate investor, how to buy real properties?
Don’t worry, we’re here to help you. The prospect of buying your first investment property might sound scary. And it doesn’t have to be that way as long as you’re willing to learn how to go about the process. Without further ado, here are 7 easy steps aimed to help you, a new real estate investor to buy your first rental property.
Step 1: Your finances
Whether or not you’re an experienced real estate investor, it will all boil down to a question of money. Yes, you need money to buy an investment property. Where could one possibly look for such money to buy the rental property? Your own savings. Before you start looking for real estate investing business opportunities, study your finances. See how much can you actually pay them out of your own pocket. Having done all that, decide which investment property can you afford. Even if you opted for a mortgage to finance the purchase, you still need to prepare a 20% down payment.
Step 2: Financing options
Most first-time real estate investors didn’t have the luxury to finance their investment property all in cash. Don’t worry, if that’s the case, you can always go for a mortgage loan. It’s important that you go to local banks and talk to them. Check how big can you take a mortgage loan. This ultimately will decide what type of investment property you can consider.
Step 3: Local real estate experts
Find someone, preferably local real estate experts, who have such experience in real estate investing. Talk to them. Every housing market posits different kinds of expectations and twists. Talking to them is one of the ways how you can familiarise yourself with these expectations. It’s best to get advice from local real estate investors if this is your first investment property. If you’re in Putrajaya, find someone who really knows how the housing market in Putrajaya works. Not only you can learn a thing or two from these local real estate investors, you also, indirectly, are widening your real estate investment network in so doing.
Step 4: A lot of research
Research. Research. Research. You have to conduct a lot of them before you’re able to decide which housing market offers the best deals. Start from where you currently are. Start locally. Study the housing market in your area and check whether they’re a good match for your needs as a first-time real estate investor. If the result didn’t go as hoped, don’t be afraid to go further and study housing markets outside of your area. Keep widening your scope of property research until you’ve found the right investment property.
Step 5: Property listings
After having successfully decided on the housing market, what follows next is for you to carefully choose the best property for your first real estate investment. Our advice is, for a start, pick a small, undemanding property which doesn’t cost too much. A property that’s in good condition that doesn’t require much maintenance. It’s recommended that you start small. Learn as much as you can in so doing. Once you feel confident enough, you may start looking to own a bigger property.
Step 6: Experienced real estate agents.
If you’re new in the world of real estate investing, you might want to listen and rely on some professional help from experienced real estate agents. Find someone who really knows the ins and outs of real estate investing business. Bear in mind that you may need to have to spend some money if you asked for their expertise. Well, that’s all right, consider that an investment too.
Step 7: Invest property analysis
You may as well start learning the ins and outs of the business itself when you can. Learning how to conduct investment property analysis is a good start. Conducting an analysis isn’t as hard as many think. There are websites, such as what we are doing here, that can help you get started. The property investment calculator will do all the data gathering, important calculations and data analysis for you. The investment property analysis and the insightful result it produces will save you lots of time and energy.
Becoming real estate investors can be both exciting and arguably intimidating (only at the beginning). Like any other businesses, once you knew all the basics, you’ll be able to do it with confidence. These 7 steps above are a good start. Follow them through and ask us any questions if you have any. Once you’re ready, head over to SpeedProp for thousands of investment properties across Malaysia.