As a golden rule with Property investment, to get the maximum from your investment you want to be dedicated for some property cycles, not just a couple of years. A well known Historic statistic residential property generally doubles every 7-10 years. But this does not necessarily mean it will always grow 10% annually – there might be years of 20% increase or 5% increase but it should all average out in the end when you look at it long term.
By starting off Choosing the location of your investment well, you will have a better likelihood of securing a property that has a fantastic history and provide you that long term desirable expansion. There are a few ways to select a Great investment property which are basic and there are some golden rules that I’d like to suggest will help you move in the right direction –
Golden Rules of property selection:
- The land area should ideally be higher than 40 percent of the entire property price combined. Above 70% and you have got a winner.
- Economy purchase/asking value should be at or around the median price in the region, and should not go more than 50 percent of the median cost;
- The area should have increased in value with consistency by 3-4 times in the past 15 years. Realtors would have historical costs of the region.
- Try to steer clear of luxury and technical properties; avoid extremely low return properties.
- Start looking for high demand properties in well established areas, and attempt to prevent mortgage sensitive areas.
- Try to search for properties you can add value too fast to make excellent equity.
The Most Important part of your investment plan is your risk management plan.
Working with a Comprehensive risk management plan that you completely understand can help you sleep better at night knowing your entrance and exit strategy bases are covered.
Cash flow management And the upcoming equity built on your investment security have to be utilized effectively as this lets you cope in times of interest rate uncertainty.