From a new home to purchasing a rental property, investing in real estate is an important decision that should be properly prepared for. Throughout the process, many documents will be signed and financial decisions made. Before you sign the dotted line, it’s important to understand the benefits and any consequences of your decision fully.
Why Invest in Real Estate?
Throughout history, real estate values have always increased over time and the market has always recovered from its various downfalls. In fact, according to Entrepreneur, every state in the United States experienced a positive appreciation in 2017. When you invest, you’re able to take advantage of various tax benefits and better returns than you will receive with stock market investments.
3 Things to Consider Before Signing
Before you invest, there are many things to consider. Purchasing your first investment property is a decision you shouldn’t make lightly.
- Consider the Financials
Before you invest, be sure to understand your future financial obligations as well as your current obligations. It’s best to understand your current level of debt and whether or not investing in a separate property is a smart move. Will you be able to handle a down payment for your property? Will you be able to take care of maintenance and any costs to get the property prepared for rent or sale?
If you cannot afford the operating costs of your property, you might need to consider waiting for a future opportunity.
- Evaluate the Complexity of the Property
Your first property shouldn’t be a large rental complex. Instead, consider choosing a simpler property first to get started. It might be best to choose a property that doesn’t require many renovations to keep your upfront costs low. Once you learn more about the process and what to expect, you’ll be better prepared for larger future projects and properties.
- Determine the Desirability of Your Property
During your search, be aware of properties that have been on the market for a long time. Although the price might be desirable, the property itself might not be. Do your research and understand what your target buyer or renter is looking for in a property. Choose properties that are desirable to these individuals to ensure you receive that profit you’re looking for.
Add an Attorney to Your Team
Before you invest, add an attorney to your team to ensure all paperwork and legal contracts are sound and accurate. An attorney will be able to guide you through this process, help with closing and aid in your understanding of your legal responsibilities. To learn more about the investment property process in Dallas, Texas, reach out to us at Lonergan Law Firm P.L.L.C. today!