Making the Most of Your Money with Sound Investments
One of the best ways when considering investment of any kind is to carry out a comprehensive study of that business, understand how it works, evaluate its ups and downs and establish its benefits short term and long term. For example if you have traditionally been investing in the stock market and then you realize that you want to take a bold move into the property market you have to read a lot and get advice from those who have been in the business for longer.
WHERE TO START IN RESIDENTIAL PROPERTY BUSINESS
If you are looking to start off in the residential property market you have to identify a property whose monthly income would be more than your expenses: mortgages, taxes and insurance included.
A great starting point would be buying foreclosure homes where you are likely to get better deals. Attend several of the auctioneer processes and understand how they work before taking part in one. In the auctioned property the, prices are normally lower than the listed prices so be keen to attend some of these events.
When you have identified your list of targeted property for auction then visit the property and evaluate its condition before bidding for the property. Sometimes the property may be in such a state that repairs and renovations would cost you too much making the property unviable. You also need to make sure you have the necessary funds in place. It’s possible to get residential development loans that can bridge the gap if you need some help before the investment comes to fruition.
Look for a property that will provide steady cash flow on a monthly basis, this is very important as you will be able to service your mortgage and will make you a happy landlord. You know what they say: a happy landlord is a good landlord.
If you are new in this business set your limits on how much you are willing to spend and how comfortable you are making this move, never ever exceed your limits.
You will keep learning as you indulge with other property investors. Additionally, as you read a lot and get acquainted in the property business, some day you will make even bigger moves.
BUY AN ALREADY EXISTING BUSINESS
Buying an already existing business is easier than starting your own because it comes with goodwill, already existing customers, equipment and staff members are in place. The business has an already existing track record and there are always opportunities with businesses for sale on the market all the time.
However it is not always as easy as it appears, consider these.
Look into the reason the owner is selling, whether it’s for retirement, change of business or the business is just about to collapse. Make sure to establish the reason not only from the owner but do your own due diligence.
Check how profitable the business is to the owner, what he takes home after paying all his bills and wages. If the returns have been depreciating be very cautious because after all you need to buy a profitable business.
Establish the local reputation of the business, mingle with people in the area and see what they think of the services and products of that business. Do not be shy about going to the local police and see if there have been complaints from anyone concerning the business. Making a sound investment is a rigorous process but the fruits are rewarding: due diligence is VERY important.