First-Time Investment Property Buyer?

• 16 January 2016
• Property Focus
• 1208 Views

Stepping up to purchase your very first investment property represents a large financial commitment, and is probably one of the first major financial risks you will take in your life. So, how do you ensure you are not buying a lemon when looking for your first investment property?

Here is the right start, from Realestate.com.kh:

1. Do you know your own strategy clearly?

The basis of a successful investment property is having and practicing a clear strategy. Always consider your “bigger picture” first and foremost.

Consider exactly what you are looking to achieve through your investment property:

Are you looking to create a supplement to your income in retirement? Or, are you looking to improve your cash flow in the short term? Alternatively, you might be trying to improve your equity position in order to consider buying more properties?

First be perfectly clear on the “WHY?” question… Only then you can think about the ‘HOW?’

This means, if it is cash flow now you want, then you had better target cash flow positive properties. Trying to improve your equity position? Perhaps you need to renovate and flip a property.

Whatever the why, you must be perfectly clear about how you’re going to make money from the investment property before you start investing.

2. Know your finances, perfectly:

Always plan your exact budget, even before you start surfing property listings on Realestate.com.kh.

Always be very clear about your precise borrowing capacity – because understanding how much can you borrow is critical! It’s pointless looking for a property until you know what you can afford to buy.

Also, you had better not forget to add in purchasing costs of that property. For example, land transfer fees can be anything up to four per cent of the purchase price. You should also factor in legal fees, loan establishment fees and property inspection fees, as all these bits and pieces begin to add up.

3. Know the buying process inside out:

Each country’s purchase process is unique, and even within the different provinces of Cambodia buying requirements can differ slightly –so, you should understand how these work in your area and in relation to your investment property.

The three steps above may seem like small considerations in comparison to the actual house hunting and inspection process. However, successful property investing is not about falling in love with a house and buying it. Keep these three steps in mind and be fully prepared to make a wise financial choice when you take the plunge on an investment property.

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