1. Are you ready?
Whoever told you that property investment earns you a passive income is lying. The buy-and-forget strategy makes a deposit not an investment.
Before you buy a rental property make sure you are prepared for the hard work that is to come. You will be spending your time screening tenants, managing
tenancies (or your property manager), tending to maintenance and repairs, actively looking at value-adding opportunities and crunching the numbers
so that you can springboard off this property into a full blown portfolio. As with most things with life, you get out of your rental property what
you put into it. If you are not quite ready to take on the extra responsibility then perhaps you are better off putting your money in a term deposit.
Before you buy a rental property make sure you are prepared for the hard work that is to come. You will be spending your time screening tenants, managing
tenancies (or your property manager), tending to maintenance and repairs, actively looking at value-adding opportunities and crunching the numbers
so that you can springboard off this property into a full blown portfolio. As with most things with life, you get out of your rental property what
you put into it. If you are not quite ready to take on the extra responsibility then perhaps you are better off putting your money in a term deposit.
Related article: How to invest in property when you have a full time job?
2. Have you done the numbers?
Before you sign on the dotted line, make sure you understand the full financial implication of this transaction to you. What is your projected rental
income? Have you budgeted for all the expenses as well as contingencies? When all is said and done, is this property a good deal for you? What are
the numbers telling you? Do not be tempted to massage the numbers in your favour just because you are desperate for a deal. If you are new to property
get someone who is more experienced to go through how they do the numbers on a deal so you know what to expect.
income? Have you budgeted for all the expenses as well as contingencies? When all is said and done, is this property a good deal for you? What are
the numbers telling you? Do not be tempted to massage the numbers in your favour just because you are desperate for a deal. If you are new to property
get someone who is more experienced to go through how they do the numbers on a deal so you know what to expect.
Related tool: Net Return vs Gross Return calculator
