Welcome to the property investment world!

Well.. almost.

Becoming a property investor is truly fulfilling and promising in terms of income, but you cannot disregard the risks involved. You have to do this wisely by making sure that you are prepared.

Here is my personal checklist that you can use as a guide. After you review this, you will be able to find out if you’re financially ready to invest in property.

You have no existing debts

Before engaging in such a big undertaking, you must first eliminate other liabilities that can restrict you in the long run. First and foremost, you have to be free from any debts. If you are still tied up with a bank loan or amortization, it may be best to first settle it and start off with a clean plate.

Read my previous article on how you can increase your credit score.

You are earning a sustainable income

Having no debt means you have no outflow of cash aside from basic necessities. Now, how about the inflow? Before any investment, you need to have a sustainable income that is consistent and reliable.

Your existing profit or salary should be enough to cover your current monthly expenses plus a surplus amount that goes to your savings.

You have emergency funds

Speaking of savings, a smart investor is always ready with an emergency fund. You never know when you will need it, but you should have a well-maintained bank account that you can afford not to touch.

The minimum amount should be at least 3 months’ worth of your usual monthly expenses.

You have the money for a downpayment and closing fees

The biggest payment you have to anticipate will be the downpayment and the closing fees. You have to be ready with a substantial amount and have it on hand. Otherwise, another party may close off a deal with the seller before you do.

You also have to be aware of your capacity because this will be the primary basis of your buying decision. Prices vary depending on location, size, condition, and so on. Knowing how much you can afford will help you gauge the type of property you should be looking for.

You have laid out your business plans for the property

Once you’ve bought your very own property, what then will you do with it? Remember that an investment should be an asset and not a liability. You should be able to utilise it effectively.

There are several ways that you can do this. You can turn the property into a Serviced Accommodation or a Rent to Rent business. If you are prepared for it, you can also do a house flip project.

You did your research and underwent training

Even with everything I mentioned above, the best preparation you can possibly do is to have someone who has gone ahead and succeeded in the business before you. If you are a first-time investor, consider looking for a property business mentor who can help you in your journey. There is a rich community of property investors out there who can share a bounty of knowledge from their own experiences.
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