Investing in property is one of the most effective forms of passive income, whether you choose to go for commercial or residential property the steps prior to making the plunge tend to be the same. These are essential to ensure you can be confident in the decision that you are making and are avoiding as much risk as possible.
Use professionals in the property industry to collect as much advice as possible. Examples of such include free mortgage advice which is readily available through mortgage brokers, financial advice and rental advice. In addition it is always good to get advice from those actually investing in property for an all-round perspective on what is involved, if you don’t know anyone first-hand then check out online property forums and social networks.
Don’t just research the property you are looking to buy, yes you will need a survey, estimate any potential work required on the property and be aware of how much rent you can expect to charge but you also need to have an understanding of the wider property market both in the area you are investing in and then you need to go as far as researching the wider economy. Get to know the property market, history, trends and predictions and be aware of any factors which may influence the price of the property you are looking to invest in in the immediate future.
When starting out it is important to get to know the industry from a first-hand perspective and the best way to do this is to be as focused as possible with your investments. This means, while spreading the risk is always a good idea you should look to avoid dipping into both commercial and residential property or properties across a number of locations, at least until you fully understand the markets.
Planning and preparation are key success factors in most forms of entrepreneurship and property is no different. Before starting out use your research and the advice you receive to create a plan for the investments you are going to make and ensure you have a contingency worked into it in the event of any unexpected circumstances.