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.
What is Property Investment?
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.
Benefits of Property Investment
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.
Disadvantages of Property Investment
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.
Property Investment Methods
1. Choosing the Right Location
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.
2. Prepare Funds
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.
3. Choose a Trusted Developer
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.
4. Check Market Prices
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.
5. Adequate Facilities
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.
6. Mortgage Approval
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.
7. Choose a Tenor According to Your Ability
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.
8. Land Purchase LetteLS
