We’ve gone over the negatives of real estate investments, common real estate misconceptions, and the positives of real estate. What’s next? Now we can assume that you’ve decided that purchasing a piece of real estate is the ideal option for you at this very time in your life. What do you do next? In my opinion I feel that the next step is to look at some of the important factors when it comes to purchasing real estate.
Now that you’ve decided to invest in real estate (I’ll be referring to your primary residence in this post, not investment property) you need to look into a few important factors:
Real estate is 100% all about location. Let’s be honest, the cost of my downtown condo could probably get me a mansion out in the northern part of Ontario– but why would I live there? I’m not trying to raise a family. Real estate prices are directly related to the location. The question that you need to address is: where do I want to live?
If you commute to work you’ll likely want to find a place that’s relatively close (unlike some crazy people that travel 1.2 hours to work, wink wink) to your destination of work. One of the most important factors is to consider how long it will take you to get to your job from your new place.
Are you willing to travel a little longer for a more spacious home? Do you prefer to live in a more compact unit that is closer to work?
What’s in the neighborhood? Do you want to be located near a elementary school for your young children? Or do you want to live closer to a high school/college for your older kids?
Another aspect of the neighbourhood that you need to consider is the demographics. You certainly wouldn’t want to raise a family in a downtown condo or in a more dangerous side of town. Would you like to live in a community with a similar culture to yours or would you prefer a more diverse community?
I have friends that have picked up properties for low prices in hopes of making some serious upgrades. Some people enjoy fixing up their property. Others would like to purchase a property that is relatively low maintenance and already has major upgrades completed. Do you want the challenge of upgrading your own home or do you want the work to already be completed?
You could save up some decent money with your partner to make a down payment on an expensive piece of real estate. However, will you be able to pay the property taxes? Property taxes can be a silent killer that eats away at your income before you even know it. This is why it’s important to always consider the property taxes in the specific area that you plan on moving to.
Yes I know that this isn’t directly related to your potential piece of real estate. It is very important when it comes to determining how you’ll pay your new found mortgage payments. I don’t want to be a downer, but a high salary today doesn’t necessarily mean that you’ll be earning a high salary down the road. You need to make a realistic assessment of the stability of your income before you decide to take on a mortgage.
Where do you guys stand as it relates to some of the questions thrown out in this post?
image source: splorp
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