There is always a first time to everything and at times lack of enough information can be a hindrance.
Investing in real estate as a beginner does not have to be overwhelming and full of uncertainties.
Below are a few tips to help you as you begin to grow your wealth in real estate.
• Identify The Kind of Real Estate Investment You Wish to Invest In
Real estate investment is in 2 main categories; residential and commercial. Further, it is subdivided into leasehold and freehold. Identify the kind of property you would wish to invest in and for what purpose.
i. Residential property – this is exclusively used for private living for a family or an individual
ii. Commercial property – this is for purposes of business activities.
iii. Leasehold property – where you only hold the land for a certain time frame subject to frequent payments. The longest you can own the property is 99 years
iv. Freehold property – where you have the absolute ownership of the property and land on which it stands. This ownership does not need to be renewed.
• Choose the best location
When it comes to real estate investment, location is a key factor. You don’t want to buy in an area just because of the price.
Depending on the type of property you are interested in choose the best location and this means an area with potential to grow, near a town, and near amenities such as water, schools, markets, etc. These are the areas to consider; Nakuru, Ngong, Kangundo Road, Naivasha, etc.
• Identify the seller
After identifying the area, you would like to invest in, look out for the property developers selling properties there. You can visit their offices, attend the property site visits. Further, you can conduct a title deed search to know who the owner of the property is. It is advisable as a real estate investment beginner to invest with a real estate company as they will help you will all due diligence, documentation and subdivision of land.
• Do your research to know the estimated value of the property
Don’t just rely on the information given to you about a property. Do your own research and know the values of the properties in that area. Knowing the average cost of properties in the area will help make an informed decision and avoid buying an overpriced property.
• Get to Know all the costs involved.
It is important to identify all costs involved during and after the purchase process. This will help you prepare the required finances for your investment and avoid impromptu financing. At this point, you will decide whether your savings will be sufficient or you will need to take a loan.
• Avoid shortcuts
There are a couple of steps you need to take when investing in real estate. As a beginner, avoid taking shortcuts and making assumptions on some critical information that can impact your investment. Ensure you get all the information and sign all documents and follow the laid down procedure in the Land’s Registry.
• Protect yourself
Make sure you are conversant with all documents involved in property ownership. Do ensure that you obtain all receipts for payments made and sign all the documents and retain a copy of the same for your records.
• Work with professionals
In the long run, it is cheaper to work with a genuine property developer such as Username, a lawyer and surveyor than to not have them. As professionals, they are able to protect you and your interests. Unfortunately, people try and run away from professionals and end up losing a lot more.
• Think and invest long term
Real estate is a long-term asset and it is advisable to think long-term when considering this type of investment.
• Be realistic in your investment expectations
As with any investment, property investment may not bring returns immediately. Therefore, do not over-expect returns in the short term, rather be realistic with returns. Do not expect to buy land worth Ksh 599,000 today and sell it for 2M in 6 months. Give the investment time to appreciate.
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