Finding success in the real estate game takes effort and know-how
Have you ever aspired to become an ace in the real estate industry? For this to happen, you must know how to maximize your buying and selling power. Before you go and hang the ‘for sale’ sign, you must learn some effective strategies to ensure you get the most out of your real estate investment.
For starters, you may want to follow these tips to secure the top spot on the ladder:
1. Buy Your First Property Wisely
The first step is to purchase your first property from trusted sources and websites such as Orlando Homes For Sale. The sooner you can buy your first home, the better.
Get a property you can benefit from. And in doing so, you must keep these tips in mind:
- Check Your Credit Rating: Before taking out a home loan or real estate loan, you should have an excellent credit rating. That way, you can get the best financing options. You must also start paying your bills or loans on time to avoid ruining your credit score.
- Increase Your Down payment: If you’re buying a property worth under USD$1 million, then you can pay a 5% down payment. But you can also go higher as it can lower your overall financing expenses.
- Select The Right Property: When you’re buying a home, you must first buy the one that’s most suitable for your needs at the moment. Rather than adding extra bedrooms you don’t need at present, you need to take it slow and look for the best property that will guarantee you great returns.
- Prepare To Upgrade Your Home: You can talk to your realtor and monitor the real estate market to know when your house has appreciated in value. At this point, you can start making the necessary repairs and beautification to upgrade your home.
2. Add Value To Your Home
While waiting for your property to appreciate, you can add more value to it with simple tricks. Depending on the extent of your home’s renovation, you can apply these moderate- to high-cost upgrades:
- Bath or Kitchen Upgrade: Although you may not need to entirely renovate your kitchen or bath, upgrading a portion is doable. For instance, you may want to change the countertop or flooring to make it appear brand new. For the bathroom, changing the old bathtub, sink, or toilet will suffice. Or you can add smart kitchen appliances, especially ones that are energy-efficient.
- Add More Square Footage: This may mean transforming your garage into an extra living area or a spare room to become a home office. If there are unfinished spaces, you use them to add more rooms to your home.
- Make A Functional Floor Plan: You can do this by removing walls between your living room and kitchen, or rearranging your living room so you can create a more functional space. You can also swap rooms if you want to create a better flow in your home.
- Change Your Flooring: Your old floor may decrease your home value, so changing it to a new one will make your entire house look brand new.
3. Build Your Home Equity
Home equity is the computation of your house’s current market value minus the balance of all liens attached to the property. For instance, if your property is worth USD$200,000 and you still have USD$100,000 to your mortgage balance, your home equity will be worth USD$100,000.
You can use your home equity to take out home equity loans. The higher your home equity, the higher amount you can borrow.
This is why building your equity will help grow your real estate assets. Here are some ways to increase your home equity:
- Pay A Big Down Payment: Aside from decreasing your financing costs, a higher down payment increases your home equity too. However, your finances should not suffer because of paying a higher down payment. Always check your savings and ensure that your monthly budget will not be affected. That way, you still have spare cash to use in times of emergencies.
- Increase Your Mortgage Payment: Instead of paying the minimum monthly mortgage payment, pay higher if you have more cash to spare. With extra payments each month, you can decrease your overall mortgage loan. Your extra payments should reflect on your monthly statements.
- Monitor The Market Value: Since your home equity relies on your property’s current market value, you can wait for it to increase along with your home equity.
4. Check The Market For Good Deals
Another way to climb the real estate ladder fast is to monitor the real estate market regularly. Not only will you be updated on the market prices and be familiarized with real estate investment, but it’s also an excellent opportunity to look for good buys.
Especially if you have a target location, stalking the market may allow you to get the best bargain. Some home sellers may be in dire need of money, and they tend to offer a bargain price.
Even if the property is outdated, you may want to grab it if it has a lower price. You can then renovate and upgrade it to increase its value. Some homes don’t even need a major top-to-toe renovation—only minor repairs and cleaning.
Thus, if you’re buying a second property, you don’t have to prioritize the repairs or renovations done by the seller. You’ve bought it at a bargain price after all. Once you’ve acquired the property, you can add value to it using the tips above.
If you want to succeed in the real estate industry, you need to buy your first property wisely. If you’re planning to live in it, then focus on the property that can cater to your present needs. Think about other things such as extra bedrooms or spaces for your next buy.
You should also add value to your home before selling it. Simple to major renovations will increase your property value. You can also use its equity to take out a loan for you to acquire a second property. Finally, you should monitor the market regularly. Doing these tips will help you climb the real estate ladder and keep you financially secure.