Knowing the difference between a Property Investor and a Home Buyer
In the realm of real estate, there is a big distinction between an investor and a house buyer. Depending on how the buyer plans to use the property, it will be judged by different standards.
Buyers should decide what they want from the home before starting the house-hunting process.
People who want to live in the home must find a home that suits their needs and should consider factors like proximity to their workplace and schools, potential family growth, and other factors connected to the general operation of the home. Investors, on the other hand, should consider variables like the average annual property price appreciation, regional demand, and local rental pricing since they are more focused on wealth creation.
House buyers and investors should be aware that the majority of real estate investments are long-term investment strategies that can take at least five to ten years to develop unless they want to flip the home.
If the home is not going to be your permanent home, you should know that it will take some time to build up enough equity to move up the property ladder. They will also have to pay bond registration costs and transfer taxes on the property they are buying. They must also pay for municipal rates clearing certificate, a compliance certificate, and an agent’s commission when selling their current home. Buyers should look for a place they can see themselves happy in for at least five years, even if it’s just a starter home. This will give them time for the market to rise in value, allowing them to save up for the costs associated with upgrading to a larger home.
Selling the property before it has had a chance to appreciate in value should be avoided if your goal as a property investor is to ensure your financial future. Make the necessary rent return estimates to make sure you can afford to live in the house for at least five to 10 years before selling.
One last piece of advice for investors is that the next year may be a good time to buy more properties to rent out. All signs from the market show that house prices will rise less quickly in 2023. If so, it might not be the best time to sell, but it might be a good time to add to your real estate portfolio so you have two or three properties that will benefit from the strong long-term growth we are sure to see once the market recovers.
