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Buying a property is likely to be one
of the most significant investments you will ever make; it also comes
with much excitement and emotion. Whether you are a first-time buyer,
or someone who has bought and sold several times, real estate investing
is very involving and requires thorough research, careful planning and
attention to detail. Here are some steps to guide you as you consider
investing in real estate.

Be realistic and stay within your budget

Most people have to borrow to buy
property. Your financial history will be key to your securing a
mortgage so it is important to get your finances in order before you
apply. Be realistic about your financial situation and be clear about
how much of a down payment and monthly mortgage payments you can
actually afford before you start pouring over all the beautiful homes
that you’ve been dreaming of.

An online home mortgage calculator is a
useful tool that will help you to determine your borrowing capacity.
You can input your loan term, interest rate and loan amount to deduce
the monthly repayment amount. Remember that spending more than you can
afford can cause a huge strain on your finances; if you default on your
mortgage, you could face foreclosure. If you can’t really afford to buy
a house just yet, there is nothing wrong with renting.

Try to get a pre-approval

It is useful to approach your lender
and run some numbers in order to obtain a loan pre-approval. Whilst
this is just a first step in the whole process, it will give you an
indication of what credit you can realistically obtain within your
budget; with these numbers in hand, you can start to take a look at
homes within your price range. A pre-approval also provides the added
comfort that when you finally identify the right property, you should
be able to quickly put the financing in place.

Identify a good estate agent

Choose your real estate agent
carefully; a tested, dependable, responsive and experienced
professional who comes recommended, will make the whole process easier.
A good agent can bring their experience and expertise to bear as they
should have sound market knowledge and be a good source of useful
current information and trends in the housing market. Interview some
agents and work with one that you feel comfortable with. Your estate
agent will discuss your requirements, likes and dislikes and preview
several properties in order to narrow down choices based on your
selected criteria.

Location, location, location

We’ve all heard the adage “location,
location, location.” The value of property is largely dependent upon
its location. Neighbourhoods change; market conditions, community
issues, the local economic and political environment, poor enforcement
of regulatory policies; these can all affect an area adversely and
diminish property values considerably and are critical to the success
or failure of such an investment.

Good schools, as well as a proximity to
shops, the business district and other important destinations, will
have a huge impact on the resale value of your property. Repeated
visits to your neighborhood of choice at different times of the day,
will give you a good feel and help you to come to a decision. As far as
possible, try to do some research on the areas current prospects as
well as about plans for it over the coming years; this will help you to
avoid buying a property that may not be in demand in future.

Arrange an inspection

Home inspections are important because
they determine the condition of the property and any repairs needed.
When you have narrowed down your choices, it is worth arranging for a
thorough inspection of the properties to help you avoid any expensive
surprises that may show up soon after the purchase. If the inspection
reveals the need for major repairs it may be possible to have further
price negotiations or for you to insist that the seller completes the
repairs before you close.

Think long term

Never rush into buying a property; if
you are impatient you are more likely to make a bad decision. Real
estate is a relatively illiquid asset and should be viewed as a long-
term investment. It can take a long time to sell a property
particularly if there is a liquidity crunch or if you are holding out
for the “right” price. Like stock market investing, real estate goes
through up and down cycles. Whilst there are boom periods in which one
can re-sell quickly, it is those who invest over the long term that are
most likely to reap the benefits from this investment class.

The real estate and mortgage markets can be somewhat complex. The
more prepared you are, and the more information you have the better. By
working with experienced professionals, and following through with a
sound plan, you are more than likely to find the property that meets
your needs.