Are you looking to buy commercial real estate? Property is a good investment that always appreciates in the long run. With the credit crisis that started in 2008 almost over, property prices have been appreciating. Buying real estate is a capital intensive venture and you want to get the best deal in the market. Below are three things you should consider when buying:
How much can you afford?
Before you start searching, put aside some amount for the venture. Knowing your budget will save you the hassle of searching for homes that are way above your reach. You can search for properties that are within you budget on MLS or contact a qualified agent to do the legwork for you.
You should be prepared to pay more in initial costs when purchasing the house. Some of the costs you should consider include homeowner’s insurance, closing fees, agent fees, legal fees and others. You can reduce your costs by cutting off agents and doing everything by yourself. However, if you do not have time to research and carry background checks on a property, hiring a professional agent will save you a lot of time.
Are you getting a good deal?
Before you buy, find out the value of the investment. The value of a property is determined by different factors including:
a) The price of comparable properties in the neighborhood
b) The size and condition of the property
c) The condition of the amenities present
d) Proximity to public amenities like roads, schools, etc.
Properties that are in neighborhoods with good schools and that have low crime rates are usually expensive and are the best if you will be selling after a few years.
You can hire a competent agent to help you with researching and valuating properties. If you are buying your first home, think about your present and future needs. For example, if you have or are planning to raise kids in the future, look for a home with enough rooms and space for your family.
Do you have the required financing?
Avoid searching for a property before you get approved for financing. Choose your mortgage lender carefully and get one with the best rates and terms. Most lenders will approve you for financing based on your credit history. If you have a low credit score, you should repair the scores before you apply for a mortgage.
Determine the term you would like for the mortgage. You can apply for a 15-year or 30-year mortgage. It is important to provide a large down payment for the loan to increase your chances of being financed and qualifying for a lower rate. The higher the upfront payment you offer, the lower you rate will be.
You should only buy property if you are ready to stay put for a number of years. If you buy and sell too early, you may make a loss as market prices fluctuate. The above are some of the things you should consider before you dive in to invest in the property market.