The wide-reaching effects of the COVID-19 pandemic have thrown a monkey wrench into the operations of all industries globally. One obvious casualty is real estate, which is understandable given how people had to realign priorities. Buying a new home took a back seat for most people in the past two years.
Thankfully, there’s an aggressive inoculation effort happening all around. And as the number of vaccinated people increases, you can expect things to slowly but surely go back to the old normal. Economies will open up again. As such, real estate experts project an industry-wide recovery in 2021.
That means you can now pursue your goal to invest in real estate in earnest. Just make sure all the signs point you in the right direction. Here’s what you need to consider.
1. Industry trends and performance
As with any goal that you’re serious about, real estate investment requires research. And with the internet at your disposal, that’s not quite a difficult feat to pull off. You can check out property investment platforms online and compare prices for different locations.
Aside from that, read economic news about the real estate market to better gauge if it’s the right time to enter the market. Your objective is to pinpoint when it’s a buyer’s market. That means supply exceeds demand and, therefore, prices tend to go down.
2. Financial stability
This is probably too obvious but one that’s still worth mentioning. Financial stability does not only mean having enough money to pay for your current expenses. It should also cover future financial plans, like your retirement fund. That means the more savings you have, the better. It will provide you with peace of mind.
On top of that, proving to lenders that you’re financially stable will give you an easier time when applying for a property loan.
3. Capital and downpayment
Most people cannot afford to buy a property outright, which is why most need to take out a real estate loan first. However, most lenders require that you put up a significant amount of the loan as downpayment to lower risks on their end.
If you’ve managed to save up enough to cover the downpayment, then it’s a good sign that you’re ready to invest in real estate. Moreover, putting down a larger downpayment lowers your monthly amortization, which increases your profit margin on rental properties.
4. Time, time, time
The process of property hunting requires time and effort. You will need to research prospects that are within your budget and whose appearance meets your expectations. Once you’ve narrowed down those prospects, you should exercise due diligence and inspect the property. There’s also a lot of back-and-forth correspondence between you, the agent, and the seller.
And don’t think that you’re off the hook now that you own a property. You’ll also have to manage and maintain the property, and fill vacancies as they happen. If you think you have a lot of time to handle this much work, then it’s high time to start investing in real estate!
5. Clear investment goals
You must be clear with your motivation the moment you decide to invest in real estate. Are you investing in a home? Or are you looking into diversifying your financial portfolio via property to rent out? Either way, there’s potential for big rewards. But you have to do the math carefully.
6. Great property and location
If you find a good property in a great location that’s within your means, you should pounce on it before it gets snagged by others.
Don’t look at just the location though. While nearby amenities like schools and hospitals are a great pull for buyers and renters, you should also consider things like low crime rates and growth potential. These factors can increase the value of the property, which, in turn, increases your profit from selling it.
As for the property itself, check how well the developer constructed the place. If you’re not equipped to know the difference between quality and substandard materials, you should hire a property inspector to help you sift through the property.
7. Risk preparedness
This is another aspect of financial stability. We’re talking about the need to have an emergency fund. A good rule of thumb is to set aside at least six months’ worth of expenses, such as mortgage payments. You can use that money should you lose your source of income, for instance. If there’s something we learned from the ongoing pandemic, it’s how things can change drastically in a blink of an eye. Financial preparedness is of the essence.
8. Expert advice
By working with a real estate broker in the Philippines, you will have a plethora of options. The key is to partner with an expert with whom you can be on the same page. You need to clearly explain what you’re looking for. Your agent should honor your choices while ensuring that you get all the expert advice you need.
The Verdict
You’ve waited long enough for the right time to invest. If you checked all the signs mentioned above, you’re ready to invest in real estate. Do not take this list with a grain of salt because it could spell the difference between investment success and failure.
To avoid the latter, consider talking with property investment experts. It’s in your best interest to be guided properly by someone who knows the industry well. For that purpose, you may contact RE/MAX for a free consultation.
