Investing in Property

Real estate property purchased with the aim of deriving a financial gain either in the short term or in the long term is known as property investment. The financial gain could be through the sale of the property in future or through rental income. Sometimes, a property may be used for rental income in the short term and then sold in the longer term.

Who can help someone investing in property?

The purchase of property should follow a certain procedure for a number of reasons. The first is to ensure that the due legal procedure is followed which may prevent loss of the property in future. The second is to prevent falling prey to fraudulent people who may claim to own the property on sale just to swindle you. Third, it ensures that you do not take up property that may have legal cases, excessive rates due, mortgages or such things. For these reasons, you need a number of professionals to assist you during the purchase.

A valuation expert will assist you in getting the correct value of the property such that you do not invest in something that is not worth the asking price. tax consultants will ensure that you understand the tax implications of the transaction both in the short term and long-term.

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They also ensure that you do not inherit any tax liability that may be due from the property. You will also require the services of a legal practitioner who will go over the lease or purchase contract to ensure that they are favourable to you. The attorney will also assist in ensuring that the transaction is legally binding and in par with the legal requirements.

As an investor, you will also need a professional who can research on the property and advice on the best use of the property since this has a direct impact on the value of the property in the long run. This should be done before the purchase in order to ensure that you only purchase properties that have the highest return on investment.

How does property investment work?

Property investments can work in a number of ways. The first option is to purchase the property and lease it out. The leases could be monthly, quarterly or even daily as with Airbnb. As the investor, you can manage the property yourself or put it up in a real estate agency that will do so on your behalf. For such an investment, you will be responsible for the maintenance of the property, payment of any rates or taxes or any other incidental costs. The second option is purely speculative where you purchase the property in anticipation that you can sell it at a profit after sometime.

The third option is to invest in property, revamp it and sell it immediately at a profit. Alternatively, you could invest in property through a different avenue such as through Real estate investment trusts where you earn passive income on your money at a fixed or variable rate over a given period of time. This is especially useful for people who do not have any idea on property investment but would like to earn from it.

Why do people invest in property?

Property is a fixed asset that appreciates with time. While some people may invest in it for the financial gain, there are those who will invest in it as a store of value. Others invest in this as a legacy and to pass it on to their families later on. There are people who have a passion for the real estate sector and will invest just for the satisfaction.