Residential properties are expensive investment choices that we all need to make at one point in our lives. It is crucial for families who are still living on rental properties that they save enough money to purchase a decent home that will provide security and safety for their children. Browsing real estate brochures to determine your options and your budget proves to be a wise strategy for individuals who wish to make wise property investments in the future.
Those who are already considering a residential home purchase, on the other hand, are advised by experts to evaluate a few investment factors that are helpful and necessary to ensure a rewarding investment choice. Generally, most are tempted to invest in a property over highly flexible payment options or predicted property Return-on-Investment. But many real estate experts have concluded that there is much more to consider when investing in a residential property.
Real estate experts suggest that a wise investor not only explores their personal interests but also reviews the geographic, economic, and financial factors involved in making a huge investment decision. Here are leading factors to consider when purchasing a residential property:
1. Location & Neighbourhood
Buying a residential property is an expensive purchase. It usually demands deliberate decision-making. For experts, location and neighbourhood are considered the most important factor that property buyers should assess when buying residential properties. And as more communities emerge across the country, investing in new estates seems an attractive choice. This is because such estates are strategically located to encourage buyers and investors of its numerous community advantages.
Advantageously positioned properties are in neighbourhoods that are distinct in their geographic features. Such properties are situated near community and shopping centres, parks, schools, hospitals, or even churches. Hence, for those who want to purchase a property in a peaceful yet strategic residential neighbourhood, assessing the location and neighbourhood is, first and foremost, highly recommended.
2. Estimated Property Value
Most property buyers find themselves interested in buying affordable estates. For buyers who are fortunate enough to find economical and strategically located properties, consulting contractors to determine the estimated value of the property is a crucial step to ensure that the investment made is worth it. This consideration is significant because low-priced properties may demand expensive restoration and renovation costs.
For some experts, the best way to determine the market value of a property is by consulting with other property owners and real estate agents. Preferably those who are transparent about the potential construction demands of the property or land for sale. In the end, doing thorough research or using online valuation tools to make a wise investment decision will potentially save you thousands of dollars you can spare for your children’s future.
3. Potential Return on Investment
There can be numerous reasons why property buyers invest in residential properties. If you happen to be one of those few individuals considering moving into a bigger and better residential property in the future, investing in a residential home with a reasonable projected ROI could be the wisest investment decision you will ever make today. Such consideration is important because it provides actual financial benefits that can impact your future property investment choices.
Some real estate experts say that decent residential properties follow the one-percent rental rule. If you are one of those individuals who would want to lease their property in the future, all the one-percent rule says is that your estate should rent for at least 1% of its gross upfront cost. On the other hand, others claim that a predicted ROI of 8 to 10% on a residential property is satisfactory.
4. Legal Obligations
Wise investors know their legal obligations. When purchasing a residential property, it is important to understand real estate laws to determine taxes that need to be paid. Most of the time, real estate agents will discuss the laws that involve property tax payments, but it is better to do your own research to get a good grasp of legal aspects that may affect your property. Moreover, being familiar with your legal obligations as a property owner is helpful to avoid fines in the future.
Interested residential property buyers are encouraged to review their city’s real property tax guidelines. On the other hand, for buyers looking to buy properties with problematic documents, consulting with legal professionals is strongly recommended.
Whether you have more than enough budget for an expensive residential property purchase or not, experts encourage individuals to think and decide like real estate investors — wise and smart to make reasonable investment choices.