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As a money making option people tend to prefer property to putting their money in the stock market because they have a physical representation of their investment. But that doesn’t necessarily mean that investing in property is easy, and there are defiantly some tips that can help you maximize your return in the long term.
Do consider any renovations carefully before you invest in them
For example, a lot of folks might automatically assume that installing things like a swimming pool, and hot tub will increase the value of their property.
However, they actually cost a great deal of money and effort to put in. As you have to work out how deep they need to be for the amount of water you want to swim in. Which you can do with a thing like this density calculator. As well as how much the labor it will cost, and price of the landscaping around the pool once it’s finished.
Once you have added all this up, you need to compare this to the potential increased profit you could make, to see if it’s actually a viable option. Or whether the money would be best spent elsewhere.
Don’t assume that property price will always rise.
One of the biggest problem that a lot of folks have when they invest in property is they believe that they are guaranteed an increase in their investment. But of course, this isn’t always the case.
Just like the stock market, property prices go up and down, and just because you have a bricks and mortar items, does not mean that you can’t lose out.
This means you have to be very careful when investing in property. You have to choose the right type, as well as get the location correct.
Remember a small studio flat in a city might end up being worth much more than a family size house in the suburbs if it’s in an up and coming area.
Do consider buy to let
Something else that a lot of folks don’t realize about investing in property is that you can buy to let for profit. This is when you buy a property, and usually take a mortgage out on it. Then you let the property out and allow the rent from that to pay the mortgage.
Then over time, you are slowly paying the mortgage off without it costing you anything. You can then sell the property when you want to cash in your investment, and you will make much more because you will have paid off the majority of what you own to the bank.
Don’t think that older properties are a better investment
Of course, the general view on property investment is buy something old and rundown cheap, do it up and flip it for a profit. Now there is definitely money to be made in this area, so I’m not saying never do it.
However, you have to know what you are doing, to be able to squeeze as much profit of out the situation as possible. Remember, if there are any costly renovations that surprise you, it can throw your whole budget and timescale off, eating into your profit.