First Steps of Getting an Investment PropertyFirst Steps of Getting an Investment Property

An investment property means exactly what it sounds like: A property you buy simply with the aim of making money from it. It could be through outright sale to make a good profit, but usually, the money is made through leasing and rents.

https://www.progressiveproperty.nz

Investing in property is a very viable means of income, especially as a passive source. The property market is a very well-structured one. It has established processes and some laws are in place to ensure that business activities go on safely. Banks and other financial institutions put a better value on land and property in comparison to some other assets. 

Investing in property can quickly become a very expensive enterprise to start. When we take into consideration purchasing the property, quality inspection, maintaining the acquired property, taxes, and the usual legal expenses, this becomes obvious. As such, making the wrong decision to invest in can be disastrous.

The following steps can help in setting you on the right path on your journey into your new business interest.

  1. Have a specific reason(s) for investing in property.

If your reason for venturing into property goes something along the lines of: “An old cobber of mine does it and it looks really cool”, you probably should have a serious rethink. Things such as whether property investment is something that can suit your lifestyle should be considered. Being highly solvent and wishing to checkmate inflation causing a decrease in your money’s value could be a good place to start.

  1. Research the market

This will help to clarify the profitability of any potential investment choices. Determine such things as location, type and size of the property, its market value and desirability in the long or short term. There is no point sitting on a goldmine nobody wants to buy for some reason, be it legal or other. You should also determine whether you might need to acquire a loan to finance your purchase. A loan requires having good credit. Visit the Securities and Investments website at asic.gov.au for detailed information.

Check out local opportunities as well as outside of your community when researching. That way you can gather more information and familiarize yourself with what is around and available to you. Something to consider is whether you’ve got an apartment, townhouse, house, land or development in mind.

If you’re a New Zealand resident, a good idea is to start at places like Progressive Property. They have a wide selection of townhouses, house & land packages and much more. 

They cater to people that are looking for their first home or even looking for an investment property too. For more information on what they’ve got available you can read more on their website at: https://www.progressiveproperty.nz.

  1. Make a budget and stick to it

Sounds typical but something else to consider with a budget is to include a macro budget and a micro one. The macro budget would include such things as legal fees and the capital intensive expenses, like the actual cost of buying the property. If you cannot immediately finance an outright buy, the deposit required is usually a minimum of 10 to 20% of the total price.

The micro-budget should include such things as recurrent expenses: Interests on any loans taken, the cost of maintenance and repairs, water, gas and electric, taxes, etc.

  1. Have a schedule for your goals

It is a salient practice to be mindful of what you wish to achieve in the purposes of investing and when you should have done so. Timing is everything in the property investment domain. Emerging deals are always coming up and market rates are often changing.

  1. Evaluate whether a caretaker/property manager is needed

If you would rather not do the face-to-face interaction with a prospective tenant or lessee, you might wish to procure the services of a third party. The advantage is that they would be acting from a more detached and rational perspective. They would seek to get the perfect balance between client agreeableness and the best obtainable profit.  

  1. Consider if you need an insurance plan

When all is said and done, consider whether you need a buffer in case of the undesirable circumstance where things could go under. Government policies, deaths of clients, or natural disasters can render a once-promising investment into a burning shipwreck sinking its way to the bottom of the sea.

After you’ve done the research and think you meet the criteria

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purchase property

Buying Property Abroad Without Taking Help From Mortgage LendersBuying Property Abroad Without Taking Help From Mortgage Lenders

Property owners looking to purchase property in Spain need to know something about the different methods of payment for such purchase. For this purpose, they should do proper market research in the area. They must find out about the property prices in the area, the local tax and Excise rates. The property purchase contract usually stipulates that the buyer is required to purchase the property at its current market value or purchase property at an agreed percentage of the property’s present market price.

Loans

An owner who wishes to purchase a property in Spain has the choice between purchase property in Spain with a conventional loan from banks or purchase property in Spain with a land contract. The land contract method of purchase is usually preferred by the buyer because it is less complicated. Here, the buyer is required to pay a one-time fee as an initiation fee. The land contract also stipulates that the buyer is obliged to purchase the property for a fixed duration, say thirty years, and is not allowed to purchase more than the purchase price of the property. The land contract also usually includes certain property taxes that the buyer is liable for. These taxes vary depending on the country where the land contract is executed.

Option Agreement

Another method of purchase property in Spain is an Option Agreement. Here, the buyer and the seller sign an agreement permitting the seller to sell the house without any kind of financial penalty after purchase. The purchase price is the entire amount payable by the buyer under the Option Agreement. In case of no purchase, the seller has no other choice but to give up the house.

purchase property

Option agreements are very common in Spain, and they have attracted a lot of people who wish to purchase property in Spain without having to pay any kind of upfront fees. An Option Agreement contains all the terms and conditions of the purchase property in Spain. However, the buyer who signs an Option Agreement must not execute any purchase contract until the entire agreement is signed. The execution of the purchase contract can be done only after the expiry of the option period mentioned in the option agreement.

Mortgage Lenders in the UK

In the United Kingdom, most buyers purchase property with the assistance of a mortgage lender. Mortgage lenders in the United Kingdom offer fixed mortgage rates and a good repayment plan. Thus, mortgage loans in the United Kingdom facilitate homebuyers purchase property with a large amount of purchase money and flexible repayment options. In Spain, on the other hand, homebuyers have comparatively lesser purchase money because mortgage rates are much lower.

The purchase contract can be executed only after the expiry of the option period mentioned in the contract. Homebuyers in Spain do not have the option of buying a property using a mortgage. The purchase option depends upon the equity present in the property. Equity refers to the value that a homeowner has built-up in his or her property. In the case of bad credit, homebuyers can purchase property even with low purchase money. However, it becomes difficult for homebuyers with bad credit to purchase property using the purchase option.

The purchase option can also be exercised by a person who is not blood kin or relative of the owner of the property. Such people can purchase property without involving their parents or relatives. A purchase option can be forfeited in case of default. A land trust can act as a purchase option and allow homebuyers to purchase property without involving their relatives or blood kin.

Purchase option and purchase contracts are two different legal instruments in Spain. Both the purchase option and purchase contracts are common in Spain. Property buyers in Spain may purchase property using either purchase option or contract to purchase. The purchase contract is considered as a less legal instrument than a purchase option.

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