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LOOK BEFORE YOU LEAP WHEN INVESTING IN REAL ESTATE

Property investment is never to be taken lightly and requires a huge amount of planning beforehand but if you are prepared to do your homework first and look before you leap, you will stand the best possible chance of being successful. Any business venture, like a house, needs to be built on firm foundations.

There is a vast amount of information nowadays on T.V networks, in books and The Internet regarding real estate investment. Make use of this wealth of knowledge and it will enable you to make a wise and balanced decision when you come to make your first purchase. The common sense, uncomplicated strategies are usually the ones that work.

Five years ago, in the UK, I decided to purchase two investment properties after remortgaging my own home to buy them outright; they were located in areas which some would describe as: "A bit dodgy" but I preferred to call them: "Up and coming." Friends advised me against my strategies saying it would be better to buy just one house in a better area but I repeated this pattern of buying houses at the lower end of the market because it worked. There is always a call for rental properties of this nature and a cheaper, smaller house can command a proportionately higher level of rent. A two up, two down terrace which is economical to run will be of instant appeal to small families and young couples on limited income.

I would advise any budding buy to let investor not to be seduced into buying residential property in more salubrious areas as these will not be the type of houses that will generate positive cash flow. You may get a more affluent tenant but there are no guarantees and remember they can still default on the rent. If your chosen investment property is in the higher price bracket then the monthly mortgage repayments will be higher too and you could soon find yourself in trouble if your tenant decides not pay. With this in mind, I would never buy a house just because I liked the look of it or if the location was desirable.

Time is one of the most important factors concerning property investment. A rental property will rarely transform itself into a goldmine overnight allowing you to "Flip" it and turn the bricks back into cash. Be prepared to tie your money up for years so don't over commit yourself and have nothing left to live on in the short term.

The figures always have to stack up so when letting property always work out the estimated income and expenditure in much

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