Many people are interested in property investment. This is because property prices are relatively stable, so investing in property is considered safe and not at risk of experiencing significant losses. However, of course, you need to know how to invest in property correctly to achieve quick success. Now, let's talk about property investment for beginners.
Before delving further into how to invest in property, it's important to understand its definition first. This is a form of investment involving the purchase of real estate (property) with the aim of making a profit. The profit itself is obtained from future resale, rental income, or both.
So property investment is often referred to as a second home, where the second home is for investment and the first home is for living. Property investments can be owned by individuals or businesses or institutions and can be classified as short-term or long-term investments.
So what are the benefits of property, why do many people seek ways to invest in property? The answer is easy. Because having a second home that can be rented out allows you to have passive income. You can even make a big profit when selling it back when the price has risen. Moreover, real estate can be said not to be eroded by inflation because its price tends to rise continuously.
Having many advantages does not mean that owning assets in the form of a house has no drawbacks. Because to start this investment, you need a large capital, the price can be tens of millions, hundreds of millions, billions, or even trillions of Rupiah. In some cases, properties can also be quite difficult to sell. So this type of investment is illiquid, meaning it cannot be liquidated at any time.
To avoid losses, you need to know the right way to invest in property. The first thing to consider is the location because a strategic location will make it easily accessible to many people. If the budget is short, you can still consider real estate located slightly on the outskirts of the city as long as the access is still good.
It cannot be denied that property investment requires a considerable amount of capital, so you need to prepare funds. In preparing the capital, you need to consider not only the basic costs but also the down payment, monthly installments, and booking fee if using a mortgage payment method.
Considering the credibility of the developer is also necessary before agreeing to invest in property. Here you need to know the developer and what kind of project history they have worked on. Later, you will get an idea of the credibility of the developer.
To avoid being deceived by the prices offered by the developer, don't forget to check the market prices first. Of course, prices that are too low can also be very suspicious. So make sure you ask the developer why the price is below or above the market price.
Checking the completeness of facilities is a property investment method that can be done by beginners. Because some properties are made haphazardly without considering their long-term prospects. So it would be better if you could make sure first that the real estate has road access, electricity, water, education, markets, electricity, and so on.
To ease home payments, you can try to get mortgage approval. This method will make it easier for beginner investors to invest in real estate. Mortgage approval can also minimize the risk of failed home buying and selling transactions with developers.
Banks generally offer various tenors when you apply for a mortgage, usually between 5 to 10 years. In this case, it is advisable to choose a tenor that suits your financial ability. So you will not be burdened when you have to repay the mortgage.
Ensuring the land certificate issued by the developer is an important step that cannot be missed. You need to check whether the land certificate is legally valid. This land purchase letter must be clear to ensure that you are indeed the owner of the property.
Next, it would be better if you also prepare additional funds. Because there will usually be additional costs in property buying and selling transactions, such as bank fees, insurance fees, notary fees, and taxes. Preparing additional funds will make you more prepared for various costs.
Although it experienced a decline due to the pandemic, the real estate and construction sectors have experienced significant growth since the early recovery in 2021. Even now, there are many beginner investors seeking ways to invest in property because the prospects are considered to be increasing. And this year, the property sector is expected to rise again.
Interested in property investment? You may still hesitate because property prices are not exactly cheap. However, don't worry because the real estate sector is expected to rise again. So there are great opportunities for property investors to make a profit. As a beginner, you can apply the methods above to avoid losses.
