Going into property investment is not something that should be entered into lightly. Too many people believe that purchasing an investment property is simply a matter of buying a building, whether it is residential or commercial, and to simply lease it out. Unfortunately, property investment is not that easy. There are several things that need to be taken into consideration before purchasing an investment property.
Property Investment – Residential
Purchasing a residential investment property is a big step into the property investment business. You need to think about:
- What type of residential property you want to buy – house or apartment?
- Where the property will be situated.
- What the property needs before leasing it
- How can you get the most money out of your investment property?
Whether your residential property investment is a house or apartment, you definitely need to think about where it is situated. You can get more money from your investment property if it is closer to public transport and amenities like schools and stores. You can also get more bang for your buck by painting the property and getting new carpets and appliances.
Commercial Property Investment
When purchasing a commercial investment property, you need to heavily consider what you want out of it. You may want to buy a factory, or build/buy a mall. Commercial property investment definitely brings in more money than a residential property investment, but repairs and maintenance also costs more. You need to consider where your commercial property investment is located and the zoning requirements. Is the property in an industrial region (factories, etc) or is the commercial investment property located in a dense residential area? You need to think about where the commercial property investment is situated to reap the most benefits from it, to understand what the concerns of your neighbors are, etc.
The next thing you need to think about with a commercial property investment is site security. Although you will have leaseholders to use the property, will you need to think about things like having security present on the property. Or perhaps you would like to install CCTV security cameras. Most commercial property owners leave this up to the lease holders, but you as the owner are responsible for repairs and maintenance, so if vandals are lurking near your investment property and your leaseholders do not have security, would the damage and the cost to repair be your responsibility or the burden of the tenants? This is something that needs to be taken into serious consideration when purchasing a commercial investment property.
Whichever way you decide to go when purchasing an investment property, remember that it is a long-term investment before it pays off. You also need to consider whether a residential or commercial property is what you want to invest your money in, and what unique features and legal requirements of your property allow or restrict you in developing the property into a more successful business or investment.
As with any stock, property or Forex investment, do research on the investment and investment company prior to purchasing any goods or services.