Investing in a property involves acquiring a property to generate income from leasing it out or renovating it and selling it at a higher price, commonly referred to as a fix and flip or rehab. It is possible to do both these things with a property, but before you put in your money or commit to the investment you must be clear about the goals you have in mind.
A common method of financing for property investment comes from obtaining a line of credit from a bank or lending institution. This becomes much easier if you have assets that you can pledge, or can even use your own savings to leverage such credit. It can also be of great help if you have a good credit score and excellent payment history. Another form of financing is a hard money or private money loan. Typically the interest rates for hard money are higher, but funds are allocated much faster, and there aren’t as many guidelines or restrictions as a conventional lender would have.
Your property investment can only be financially sound, if you make sure that the property you buy is the right product, which has the potential to create returns for you from leasing or reselling. You need to have property in the right location, and any rents that you demand or price that you hope to get for selling it, must be in line with the market and the neighborhood. Consider all aspects of your property investment, before you make any commitments. It is only if you find that the return on your investment is likely to be substantial, that property investment can be beneficial.