Is It the Right Time To Buy?
One of the biggest questions when it comes to real estate buying is, what is the right time for it? Due to all the complexities and the different factors involved, there is no straight answer. One has to carefully monitor the market and strike when he feels it’s the most appropriate. Most experts believe that the right time to buy real estate is now, no matter if you’re 25 or 45. A properly researched purchase of real estate can very rarely go wrong, they argue.
All the same, there are certain upsides and downsides to buying property in different stages of your life:
- Buying ‘young’, say before one reaches the age of 30, depends largely on the individual’s income. The benefits for buying young are:
- Tax Benefits.
- Better life planning.
- Fewer financial burdens when he/she grows older.
- Buying in your ‘middle’ age, after the age of 30. Generally speaking, the price of property rises with time, so the longer you delay, the more you’ll end up paying for your home. Benefits for buying later in your life are:
- You have more income at your disposal.
- You may have your partner’s contribution to help as well.
- You will be able to buy property better suited to your long term investment planning.
Assess your Affordability
Once you do decide when you’re going to buy your first rental property, the next step is to assess if you can truly afford it. When purchasing your property with a loan be sure that the property will cash flow with the required monthly payments.
What to buy?
So, now that you’ve decided you do want to buy your investment home and you’ve got the financial aspects sorted out, it comes down to the final decision. What type of real estate should you buy; single family residence or a multi family or maybe a commercial property. Depending on which you choose if you're willing to do some of the fix up work you can build in a good amount of equity if you purchase one that is in need of some work.
First thing first. If the property needs work you should be able to purchase at a considerable discount. They are perhaps more suited for investment purposes, they will give you higher returns in the future than properties that are in good shape and fully rented.
It really depends on how much time and effort you are willing to put towards the investment. If you do not have a lot of free time to spare and you want to gain all of the benefits of rental real estate than a fully occupied ready to go property would be the better choice.