If you’re keen in civilizing your
lot in life by becoming a property tycoon and investing your hard-earned
capital into income-producing properties, there are some general tips that
should increase your chances of maximizing wealth.
One of the better ways to improve
your wealth is to reduce your risk on the properties you purchase. This will
allow you to
buy lower-risk
real estate, which hopefully will earn a fair
amount of wealth for you over time. Go for these:
Owning your property for a longer time span!!
The most important tool in
real estate
investment property in Pakistan is to keep owning it for a long time —
in fact, forever is the optimistic approach. So be careful and buy quality
properties that you really like for all the right reasons, and plan to own them
for good. That’s your best stake to make wealth on real estate.
Grab Properties with decent quality tenants in place!!
There is nothing better than
purchasing a property with a potential tenant already in place. You get the
security deposit and pro-rated rent, and you don’t have to go in and clean,
paint, update or fix too many things in the unit. If you buy properties in
areas that have decent credit quality tenants, that’s hopefully the type of
tenant you will inherit. Also take a look at the current tenant’s lease, credit
application and credit report, if you can, before you make the decision to
purchase the property.
Properties in very good shape!!
Skip fixers and in its place buy
properties that are in as good shape as possible, which should get those rental
checks coming into your bank account in as short a period as possible.
Too many people are with the
perception that they’ll add value by doing a renovation. But instead they get caught
in a much more costly and time consuming property than they ever expected. More
money into the property means lower investment returns for you and less
wealth-building than you expected.
Properties in moderately priced areas bring fruitful results!!
Real estate is all about locality,
location, position! The properties in the finest locations generally have very
negative cash flows, so those are the location, location, locations you want to
avoid. The moderately priced properties in working-class areas are the real charm;
they generally have the boring locations, but bring positive cash flows. Of
course dig out any deal with conformist rents and expenses, and go for
beginning year cash on cash return of at least 4 to 6 percent, based on your
conservative estimates.
Vacant
areas lead to vandalism!!
Vacant places get robbed, incur damage
and don’t have any rent coming in to cover the bills. If you buy in places with
really high vacancy, it will lead to cover months or years before you get the
property rented out at a fair rental rate. So really think through buying
properties in areas with many unoccupied units.
If you buy properties with ALL the above characteristics
that will greatly increase the chances you will add wealth from your real
estate ownership. So try to acquire properties that have as many of the above
good qualities as possible, and skip the ones that don’t make the cut!
