Investing in property, whether to rent out or live in, can be an extremely lucrative investment. But real estate can also be a volatile and unpredictable market. Therefore, it’s essential that you know exactly what you’re letting yourself in for before progressing any further. Because if you were hoping that investing in real estate was a guaranteed money-spinner, we’re here to tell you that it’s not a decision to be taken lightly. So, to help make sure that you go in with your eyes open, we’ve compiled this handy checklist of things that you need to consider first. It’s designed to help stop you from making a financial decision that you may live to regret.
Are You in a Strong Financial Position?
To have a secure job in the current economic climate is like gold-dust, so if you’re lucky enough to have tenure, for example, then property investment could be a shrewd move. However, if you work on a freelance basis and don’t always have a regular salary, securing a mortgage could prove to be difficult. Renting an apartment on a short-term basis provides you with a level of freedom that real estate investment simply doesn’t. Because whilst it may sound good to own a property on paper, the reality of it just isn’t suited to everyone.
Are You Able to Fulfill Your Legal and Financial Obligations?
Whether you choose to live in or rent out your property, there are certain responsibilities that you must take great care to meet. If you rent out the property, there’s insurance to consider. It’s also your responsibility to ensure that the property is well maintained and that everything functions as it should. If you fail to meet such obligations, you could find yourself in financial hot water. So, if you’re someone who has very little time on their hands as it is, you may want to consider taking another route.
Equally, if you plan on living in the property that you invest in, you need to be as confident as possible that you’re able to keep up with the mortgage repayments. This type of loan is probably going to be the biggest financial commitment that you’re ever likely to make. So, if you’re not ready for that kind of responsibility, you may be better off renting for a little while longer.
What Happens if Interest Rates Rise?
If you’re stretching yourself to your financial limit by investing in a property in La Jolla, you need to consider what happens if interest rates were to rise. If you’re barely able to fulfill your obligations now, you could end up finding yourself in a precarious financial position that you’re unable to get out of. If you also have a family to consider, you need to think very carefully about the future, just as much as the ‘here and now’.
There can be little doubt that getting one foot on the property ladder is desirable for the majority of people. As long as you go into it with your eyes open, it could end up being the best financial decision you ever made.
Categories: Real Estate