The property ladder can be one that leads to excellent wealth-building, with assets that can be a real financial utility. It can also offer some risks, however, especially if you jump in unprepared. Here, we’re going to make sure you avoid jumping into any investments that can end up biting you in the behind.
Not having your finances prepared
Before you even start to look at any properties, you should make sure that you are financially ready. This means having a mortgage pre-approved, as well as budgeting for all the unexpected costs of buying a home. Otherwise, you can start looking, see a property that fits all of your needs, but not be able to move fast enough to get your hands on it. Needless to say, this can be extremely demoralizing.
Looking through all the “normal” channels
If you’re moving from one regular residential neighborhood to a slightly nicer one, there might not be much difference in how you find the properties you’re looking for. However, if you’re moving into really high-end neighborhoods, such as luxury lifestyle homes, then you should be looking at those who deal specifically in those. Luxury real estate agents, private listings, and websites targeted at specific high-end areas can help you better find the homes that suit your needs since they’re not likely to be on the average listing.
Investing in improvements that don’t add real value
If you’re looking at the home improvements that you want to make, then it’s very likely that you might be making some with improving the investment potential of a home in mind. However, you should be careful about not just what you invest in, but how much you invest in it. For instance, water features like pools and fountains can be good investments in high-end homes, but regular residential area properties might not benefit much from them because fewer people in that income bracket want to pay for that upkeep. In such areas, things like adding space, renovating kitchens, and fitting new bathrooms tend to be better home improvements to make. However, you need to make sure you stand to gain more from the investment than you spend.
Paying more than you should
If you’re moving up the property ladder, it may be fair to say that you’re new to the particular market that you’re looking at. High-end sellers may recognize this and try to high-ball you in the negotiations. Don’t get twisted, the rules are the same in any housing market: look at whether the demand for the property justifies the price and look at what past houses have sold for in the same market. Don’t let your emotions blind you and make you pay more than you should.
Good property investment is all about knowing your aim with buying the property, doing your research to find the properties that best fit your goals, and having a plan that goes beyond the next individual property. Master these and you should be able to do just fine on your way up the ladder.
CANDY TAI is a wife to David and mom of 5 with a degree in Communications. She's a native Texan (Hook 'Em Horns!) who's been making her home in the Kansas City metro area for nearly 15 years. She loves being able to shuffle her kids from their various sports activities, piano lessons, and school activities. She enjoys fashion, beauty, reality TV, and moviegoing.