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So you’re a homeowner, you’ve made it this far, put your own personal stamp on your place and are quietly pleased with all that you have achieved, but what next? Well, one option capturing the imagination of many is to get into real estate, either buying-to-sell or buying-to-let.
Buying-to-sell and buying-to-let both have their positives and negatives but one thing they both have in common is that they can reap big financial benefits for those willing to make the investment. Buy-to-let properties, for example, can be paying their own mortgages off whilst also making their owners a decent amount of profit. Intrigued? Well here are 3 things to consider.
Should you buy-to-sell or buy-to-let?
Comparing the options of buy-to-sell and buy-to-let is a bit like trying to compare an apple to an orange, they’re both fruit but very different kinds. So although buy-to-sell and buy-to-let both come under the category or real-estate investment they’re also very different business models. The main difference between the two is that buy-to-let is a form of passive income that you will need to get involved with every now and again, and buy-to-sell is more like a job that you can clean your hands of once the sale is completed. So, to decide which you should do you need to consider if you want the passive income a buy-to-let can offer you or the one-off profit of a buy-to-sell and also how much input you want to have along the way.
Have you done your research on the housing market?
The housing market fluctuates on an almost daily basis with things such as the economy and political landscape impacting people’s decisions to buy, sell and rent. This, in turn, affects the price of housing giving you the opportunity to buy at below-market-rate and the sell, or rent, once the situation improves. Getting to know the housing market of your area doesn’t happen overnight and you will need to put in a bit of your research. So before you make any crazy rash decisions, start attending a few property auctions, look in the windows of real estate agents and follow a few realtor forums or publications to get in the know.
How will you finance your purchase?
A goal without a plan is just a dream, so be sure to sit down and think about how you are going to finance this business venture. Do you have savings put aside? Could you make savings if you commit to a budget or will you need to take out a rental loan through a company such as Visio Lending? Rental loans are awarded based on the potential profit of the property in question and not on the income of the people purchasing it and so can be a great option for those looking to get into real estate without any capital and for those looking to expand their portfolio. Remember that buying your new property to rent or sell is just a portion of the investment you may need to make, and many properties require a little TLC to make them look brand new again in order to turn a profit.