By Benjamin Mariner | Bricksave
October 07, 2024
News > Blog Article > 7 things you should ask yourself …
For many, entering the real estate investment market can feel like opening a can of worms. It’s fair to say, it’s not always straightforward. However, once you’ve got a handle on the basics, it becomes much simpler. Whether you’re new to investing or looking to expand your portfolio, asking the right questions can help you navigate with confidence.
Here are 7 questions to consider before diving into real estate investment:
Start your real estate investment journey today.
This may seem obvious, but determining your budget is the first vital step. Knowing how much you’re willing to invest helps narrow your options. Be realistic—consider not just the purchase price but also any legal fees, ongoing maintenance, and potential vacancies. If you’re borrowing, ensure you take loan terms into account. Setting the right budget ensures you can invest comfortably without overstretching yourself.
With platforms like Bricksave, you benefit from a different approach. Bricksave doesn’t borrow money to invest in properties, which not only lowers costs but also reduces the risk of financial complications. This means your investment is safer, as the property isn’t leveraged with debt, and it allows you to access opportunities at a lower cost without taking on the burden of financing.
The market can make or break your investment. Take the time to study current trends. Is the real estate market on the rise, or are prices levelling out? Research interest rates, housing demand, and any economic factors affecting property prices in your chosen location. A booming market may seem tempting, but careful analysis can help you avoid buying at overinflated prices, ensuring you make an informed decision.
Location, location, location! It’s a timeless mantra for good reason. The area you choose can significantly impact both rental yields and property appreciation. Are you looking at an up-and-coming neighbourhood, or is it already well-established? Is it urban or rural? Proximity to schools, transport links, and amenities will play a major role in how attractive the property will be to potential tenants or buyers. Make sure to thoroughly research the area’s future potential.
Real estate isn’t a one-size-fits-all investment. Do you want long-term growth with steady appreciation, or are you after high-yield rental income in the short term? Understanding whether you want to invest in residential, commercial, or even niche markets like holiday lets will shape your approach.
For example, a Class C/D property might offer higher rental returns but comes with greater risks, such as frequent tenant turnover or higher maintenance costs. In contrast, a Class A/B property in a prime location could offer lower rental yields but stronger potential for appreciation. Ask yourself whether you prioritise short-term gains or long-term growth.
Time frames are crucial. Are you looking to flip a property quickly, or do you plan to hold onto it for the long term? Short-term investments can be risky—market fluctuations and unforeseen costs can eat into profits. Long-term investments tend to be safer, providing an opportunity for appreciation and a steady income stream. It’s important to align your time horizon with your financial goals.
Diversification is essential for reducing risk. Ask yourself whether you’re over-relying on a single asset class, market, or location. Spreading your investments across different types of properties or geographic areas can help shield you from downturns in any one market. For example, investing internationally might open up new opportunities and act as a safeguard against a local market slump. Diversifying your portfolio not only reduces risk but can also increase your growth potential.
Finally, the big question: How hands-on do you want to be? Managing a property yourself can be rewarding, but it requires time, effort, and expertise. You’ll need to deal with tenants, handle maintenance, and navigate legal matters. For many investors, the hassle simply isn’t worth it, and they prefer to work with property management professionals or platforms that simplify the process. If you’re looking for a more hands-off approach, platforms like Bricksave can help you invest in real estate without the day-to-day responsibilities.
Earn passive income by investing with Bricksave. Invest today.
If you can confidently answer these questions, you’re likely more prepared than most to start investing in real estate. But if you’re unsure, or if the answer to number 7 is a firm “no”, it might be time to explore how Bricksave can help. We offer a simple, hassle-free way to invest in international real estate without the need to manage properties yourself.
Investing carries risks, including loss of capital and illiquidity. Please read our Risk Warning before investing.
