Right before you get your first ever pay-check your investment planning should begin. With income comes responsibilities. With income comes taxes! So if you want to save more and secure your future you definitely need a reliable investment strategy. There are various places and various assets on which you can invest. The characteristic of a good investment strategy is diversity. Have a perfect mix of investments so that you would be able to balance the liquidity, returns, interest rates and tax benefits. Never venture into an investment that you are not confident about. There is one investment that even the beginners find easy to learn and that is the investment in real estate.
Real estate might be the easiest investment but you still need enough preparation so as to avoid the risks and to take the right decision. Investing in real estate without really understanding the pros and cons of it is a mistake that most first time investors make.
Not concentrating on the renovation and maintenance
The depreciation of a property increases if the property is not maintained well. Periodic renovation of the property and timely repairs and maintenance activities would ensure that your property fetches a good resale value. So these are essential expenses.
Not exploring the various markets and the various options
Real estate markets are difficult to predict. But if you watch the market closely you would be able to identify the markets that have a huge potential for growth in the future. These are the ideal locations for investment. If you are looking for a house to reside in then you might definitely need one that is close to the heart of the city or one that is near, other essential amenities. But some remote locations which currently might be less expensive to invest in might fetch great prices in future provided there is something big coming up nearby. So always make sure that you explore all the available markets and the options before you plan to invest in real estate.
In real estate, much like other investments, it is always a good idea to take calculative risks. But you should have a contingency plan to act when things go wrong. Aim at reducing the risks and avoid properties that do not have clear legal documents. To further mitigate the risks approach a reliable bank or lending institution for loans on the property.