If you’ve reached a time and place in your life where you’re ready to start really having your money work for you, finding the right investment is the logical next step. However, if you don’t have much experience with investing your money, you might feel very overwhelmed at this idea.
In situations such as this, many people feel that the best first step into investing is to purchase a piece of property. So if this is the path that you’re wanting to go down, here are three tips for choosing your first investment property.
Get Advice From The Experts
Before you get too far down this road on your own, it’s wise to get some advice from experts or people who’ve done this type of investing before.
One great way to do this, according to Arthur Garcia, a contributor to Money Under 30, is to take a course about buying an investment property. Depending on where you live and what the real estate market is like there, you can likely find some local people who are willing to share their knowledge with others like yourself. Just make sure, however, that you do some research about the person holding the course before you sign up, as you don’t want to be lead down the wrong path early on in the process.
With the right mentor and the right price for their services, you could be setting yourself up for some great success with your first investment property.
Go With A Single-Family Home
As for the actual type of property that you should go with for your first foray into investment properties, Kathy Fettke, a contributor to Fit Small Business, recommends that you start off with just one single-family home.
While you might have heard that getting some type of complex or multi-family building could bring you a greater financial return in some cases, if you don’t have any experience, it’s best to keep things as simple as possible for yourself. When you have just one single-family home, you only have one property and one renter to deal with, which can be a safer way to gain some much-needed experience before you begin investing more time and money into this venture.
Give Yourself A Big Margin Of Error
Before you get your first investment property, you’re going to want to do a lot of research in all areas of your investment to ensure this makes financial sense for you.
According to USA Today, the best financial situation in which to start with an investment property is one in which you’ve given yourself a big margin of error financially. By putting yourself in this type of situation, you’ll be able to give yourself a better chance of being able to comfortably cover all your costs while still getting a great return on your investment.
If you’re looking to make your first purchase of an investment property, consider using the tips mentioned above to help you pick the right piece of property to buy.