Tips for Investing in Real Estate
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Buying real estate is big deal, whether it’s your first home, a vacation home, or a property you hope to rent or sell for profit. Before you put down any money or agree to a mortgage, there are a few things you should know about buying real estate.
Only buy if you know you are ready and if the property is truly what you want. You can always repair or replace things later, but it’s easier to start with what you want instead of what you know you’ll need to replace.
Figure Out What You Can Afford
One way to determine how much you can afford is to multiply your annual salary by 2.5. That number is well and good, if you don’t also have any lingering student loan debt or car payments. That the number may need to be much lower if you have a lot of monthly expenses, such as car payments or debt, as well any medical bills and other costs.
The number may also need to be lower if you plan on moving to an area with high property taxes. Talk to a bank or use a mortgage calculator online to help you determine how much house can afford. You may want to get a loan pre-approval so that you have a number fixed in your head.
When you buy a house, you’ll need a down payment. You’ll also need money to cover closing costs, unless you can convince the sellers to pay the closing. A down payment of 20 percent is ideal. It means you’ll get a lower mortgage amount and won’t have to pay as much each month.
You can also put down less than 20 percent and still purchase a house or other real estate. If you put down less than 20 percent, you’ll most likely need to purchase private mortgage insurance for an additional monthly fee.
Check Your Credit
A good credit score is key to getting a good mortgage. A few months before you even start looking for a house, check your credit report. There may be errors that can hurt you when it’s time to apply for a mortgage. If there are any mistakes, contact the credit agency and get them fixed.
Remember to use credit wisely in the year or so before you intend to buy. Don’t run up credit card debt on frivolous purchases. Pay your bills on time. Try to pay off your balances during the year before buying real estate so that you don’t bring any lingering debt to the table.
Know What You Want
Before you contact a real estate agent, know what you’re generally looking for in a property. If you’re buying a house, decide how many bedrooms is should have, whether it should have a porch or a yard and how many bathrooms it should have.
Location is important as well. For example, if you plan on having children or already do, you’ll want a house in a good school district or near the private school of your choice. Look for property for sale in Hua Hin as there are some great schools nearby. If you’re buying land, decide how much you want and look for land that is zoned properly.
You may end up needing to be flexible on some matters, such as the kitchen size or the tile floors, but it’s generally a good idea to go into the process with a clear idea of what you want to live in.
Think to the Future
It’s easy to think of the present when buying a house. If you’re single, you only need one bedroom. But if a partner and family are in your plans, you may want to look for a house with multiple bedrooms.
Also consider how long you plan on living in the house or in the area you’re in. If you’re only temporarily living someplace, it may make more sense to rent. You may end up losing money if you buy and have to sell within a few years.
Know What to Offer
When you’ve found a house or other property you’d like to buy, figure out what amount to offer the sellers. You don’t want to make too low of an offer and insult the sellers, nor do you want to offer too much. Be prepared to negotiate with the seller.
Do your research before putting in an offer. Look at what other properties in the area went for versus the asking price. You may want to offer the asking price in an area where properties are selling quickly.
If the house has been on the market for a while, make an offer slightly below the asking price. The seller can either accept it or offer a counter-offer, which you can then accept or offer your own counter-offer.