Investing in your own property for your retirement, or at any point in your life, is certainly a good move that you can make. Having your own real estate property not only gives you the means to secure your own needs for shelter; in some cases, real estate can be a source of income for its investors.
Size Does Matter
The 1998 Godzilla movie once had the tagline, “Size does matter.” In real estate, size DOES matter. Size dictates almost everything about your investment. For instance, size is a big factor in determining how much investment is actually needed because the price is usually calculated by lot size multiplied by a certain market price.Unfortunately, one of the pitfalls investors make when choosing their first real estate property is being unable to determine what size of property their investment would be! Some people, while they do have the resources, end up wasting their money because they bought a property at the wrong size!
Here are a few tips to bear in mind when choosing between a small size or a larger size property. Read on so you won’t make the same mistakes others before you did.
Determine What You Need the Property For
First off, what do you need the property for? This alone can answer the question of which size of property that you will want to invest on.
If you’re buying a property for residential purposes, you’ll need to look at the size of your family first. Do your two daughters need to have their own rooms or can they do with sharing one room? Do you really need a house with five bedrooms when your family only has three people, including you and your wife, in it? Questions like these will help greatly in deciding how big you need the house or lot to be.
On the other hand, if you’re buying a property for commercial purposes, having a larger one can be advantageous. You can have more rooms for lease or rent, thus, you earn a bigger income every month after the expenses if you have a large commercial property that you put up for tenants.
Look at Your Financial Capabilities
For residential buyers, you’ll need to take into consideration the fact that the size of the house is also directly proportional to the costs of its maintenance. The bigger the house, obviously, requires a lot of maintenance. It may sound cool and appealing to have an extra room that you can convert into a showroom for your budding Star Wars figure collection, but it requires maintenance as well.
The same is true for commercial properties. You’ll have to shoulder the maintenance of the portions of your property that you put up for rent or lease while there is still no tenant who signed a lease agreement with you.
You’ll have to look at how much you are ready to spend on the property BEYOND the initial investment required to purchase the property. If your budget or financial standing is not sufficient for the maintenance of a house that’s bigger than what you need, then you’ll have to back off and pick another.
To summarize – know what you need from the property that you’re looking to invest in, and see if your budget or financial health is enough to answer the costs of maintaining the property.
Hopefully, these tips will help you out in choosing which property you would like to invest your money in so that you can make the most out of the money you put into it.
