3 Property Investment Tips

Property Investing you may find useful

Now that we are seeing the housing market getting stronger and stronger, people are looking into investing in property once again, either for themselves or as investment income. But the rules have changed somewhat since the economic crisis we have suffered these past few years. Below are some tips if your are considering investing in property.

1. Interest Rates and Property Loans

The interest rates are still quite low and that is a plus and one reason we are seeing people getting back into the real estate market. However, many have suffered economic setbacks due to the past few years of economic crisis. What this means for many is a poor or less than stellar credit history. This could impact their ability to get a loan or, at the least, raise the interest rate up several points to compensate a low credit rating. Some lenders may make the loan but attach penalties for bad credit ratings.

This means less of a bargain for the buyer which certainly is an issue if the buyer plans to use his loan to purchase income property or flip a house as there will be less profit in the end. The good news is at least the loans are out there even for those with a low credit score. A smaller bank is a good place to begin looking in such a situation.

Tip 2: Know the Market

Make an effort to purchase in an area that promises to increase in value in coming years. Most US real estate sites such as zillow.com give estimates of the percentage of increase potential in any given neighbourhood. If you plan to buy for yourself and stay forever this is not an issue. But we're talking property "investment" here, so you want to pick a property that will increase in value in the coming years so when you sell you will see a profit for your investment.

3. Home Improvements

If your purpose in buying is to rehab a place and resell, you want to consider the cost of necessary repairs and whether you can do them and still see a profit. There are certain improvements that usually can guarantee an increase in value in the home, such as a remodelled kitchen or bath, or an in-law quarters or bedroom suite. Other improvements are merely cosmetic and promise little in profits.

These are just a few tips to consider if you want to see your property investment bring positive returns.