When you're looking for a solid investment, real estate might be on your mind. Real estate can be a great way to put your money into an asset that builds your wealth over time and pays off in the immediate future if you choose to have renters.
Real estate can be a risky business, though, if you're not careful about which property you buy. To make things easier on yourself, there are some questions you should ask before moving forward with a purchase.
1. What is the local area like?
This is one of the first things to consider. Is the property in a busy city area that is continuing to grow? Are there many large, valuable properties there? Is it a run-down community? The area the property is in will affect how much of its value it retains and if the value grows over time.
2. How soon can you pay it off?
Investments are best when they aren't a debt. If you plan to rent the property, figure out how long it will take to pay off the property and if you can pay it off early without penalties.
3. Is the property in demand?
Finally, look at demand. If you built an apartment building in the downtown area, it would likely have more demand than one in a rural area. Consider this when you make a purchase, especially if you want to fill the property with renters.
These are a few questions to ask before you buy a property. Make sure you speak with an experienced real estate attorney to make sure the contract you have is in your best interests and that you can back out if the property doesn't suit your needs.