Investing in real estate is not as straightforward as you may know. It requires astute approach to ensure the huge sum of money allocated is well-planned for maximum returns within your financial capability. Here are four aspects that can help you make better decisions.
- Financial and mortgage optimization
Take time to understand your current income and spending patterns. By understanding your total financial health, you will then be able to measure your financial stability, decide your risk appetite and strategize the best approach to achieve your goals. Whether or not to max out your loan limits to buy the most expensive property you can afford depends on the strategy you are using and which phase are you at in your real estate investment journey.
- No man is an island
Leverage on the expertise of the professionals around you but always remember to reward them accordingly for the services they render. In the long run, it is more costly to pay less then to pay more. Also, always maintain your network such that you are in the loop when there are closed door deals. Join an interest group or set up regular meet up with friends alike.
- Buy only undervalued properties
Sellers in the market place have gradually accepted that selling at a loss is the new reality and most wait no further to offload their underwater property to lighten their financial burden.
The edge property provides free copy of pull out every Monday which contains information on the biggest losses property transactions for that week. You may search for the same development to find remaining sellers who are also letting go at bargain. If there are no listings in the same development, the recorded transaction may be a unique case of overpriced purchase mistake done by one individual rather than the estate being overpriced when it was launched. For such distressed sale, unless you are in the circle, you probably won’t receive such information.
- Don’t buy with emotion
Do understand the reasons behind those record breaking sale of premium HDB. Do not be a victim of inelasticity of supply.
- Maintenance & Interior design
Well maintained furnishes and unique design themes will certainly command for a premium when the time is ripe to sell. Doing up a good quality renovation and good preservation will serve you well in the long run. Furthermore, simple maintenance furnishes keep cost low, if you are letting out your property, to achieve a higher rental yield.
- Showcase the value of your property
Sell the value of your property to buyers who appreciate this value. By staging your property well will highlight the value of your property to potential buyers who appreciate it. This cost about 1% of the purchase price which could generate an additional 8-10% proceeds (a.k.a. capital gains).
- Study the URA master plan 2014
Checkout this Strait Times tool that highlight the private residential projects completing in 2016 / 2017. Also, do not forget to use your natural senses to detect signs of redevelopment.
Buy anywhere along the current and upcoming MRT tracks will never be wrong.
The above are basic principles of real estate investment to kick start your adventure, always remember real estate investment is a marathon. Start early and pace yourself well. Best of luck to you!