If you have already started your investment portfolio you have probably learned a thing or two about investing. One thing you probably know is that you don’t have to be an expert to invest successfully. Another might be that the younger you start the better. But despite these facts there may be other surprising facts you may not know about investing.
Costa Rica is a beautiful country full of friendly people. It is also a great place to relocate to from the U.S.A. Investing in Costa Rican land or property is a wise move right now. Here are some tips to make it easier and quicker for you and your family to move to this lush Central American country.
Hire a Good Realtor
You may not like the idea of working with a real estate agent in Costa Rica, but there are some very good reasons for doing so. Unless you really know the areas where you’re considering purchasing land and you already have experience purchasing land in Costa Rica, you are going to need professional help. You need a realtor who is bilingual, focuses on a certain area and has at least five years’ experience.
Check Out Different Locations
Depending on whether you’re looking for commercial or residential land, you need to talk to your realtor about zoning. They will be aware of the zoning laws in their area and should have a zoning map on their computer. Zoning plans determine the limitations on construction; regulate density and use of the land for anyone relocating to Costa Rica. Make sure you will be close to any amenities you need, such as schools, hospital, shopping and churches.
Consider Topography and Soil
Costa Rica has a significant rainfall every year, so you don’t want to build your home at the bottom of a hill, otherwise, you will encounter some serious drainage problems. When you are looking at large tracts of land, keep your eyes open for signs of soil erosion. Many areas of the country have poor quality top soil, which you will need to replace before you commence building.
Check Accessibility for Utilities
Make sure you can run water and power line to the front of your property. This will mean you can apply for meters from the appropriate companies and be connected within seven days. Check with cable TV and Internet providers within the area. Few areas in Costa Rica are connected to city sewer lines so you will most likely have to have a septic tank installed.
Transporting your Belongings
Of course you will want to take you belongings with you when you move to Costa Rica, and in fact, it is less expensive than purchasing them new once you arrive. Shipping costs to Costa Rica from the U.S.A are not as expensive as you may imagine. For example, a loaded 20-foot shipping container of household goods from your house in Texas to your new home in Costa Rica will cost around $9,000 USD to transport. This fee includes everything from wrapping to packing and preparation to export to customs and delivery to your new residence. Here’s some more information about shipping to Costa Rica.
Talk to the right people and make the right plans before you buy land in Costa Rica. Once your home is built and you are ready to relocate, find a reliable company to safely ship your belongings, and enjoy your new home.
First-time property investment and home buying can be an overwhelming endeavour to say the least. Making such a major purchase and investiture of your time and money is challenging and there are many mistakes that can easily be made in the process.
You certainly don’t want to fall victim to the market and end up losing money. If you want your first property flip to be a success and hopefully continue to do well in the real estate game, avoid these common mistakes like you would avoid buying a run-down shack in Humpty Doo, Australia.
While home may be where the heart is, your wallet should be where your brain is. Thinking critically and using logic when making your first property buy is absolutely necessary.
Investment properties should always be bought by doing market research, not because you think your kid would like the swimming pool. A mindset for financial gain will win every time over emotional impulse when trying to flip real estate.
Your first purchase should be geared towards return on investment and nothing else. If you plan on renting the property out, for example, consider factors such as: what kind of occupants do I want and does this location provide them?
Underestimating the costs
There are many costs apart from the sale price of your home that need to be considered before making your first purchase. If you fail to take these extra costs into account, you can be sure that you will spend well over your budget.
Some calculations to factor into your budget:
• Realtor commissions
• Moving costs
• Property taxes
• Maintenance fees
• Insurance payments
Another thing to keep in mind is whether or not you will be using any loans to help cover your expenses. If so, it’s important to be informed of things you should consider when looking for a personal loan.
Not buying for the market
This ties in with the earlier point about thinking logically and doing research beforehand. If you don’t know the market, the chances of you buying the wrong property increase substantially.
What does buying the wrong property mean?
It means purchasing a property that won’t sell according to your area’s demographics. For example, if you’re looking to make a purchase in a suburb that primarily brings in families, you don’t want to invest in a bachelor’s pad.
Buy according to your market and avoid being stuck with a large family home in an area full of hipsters in condos.
Neglecting to perform a property inspection could probably be paired with underestimating costs but really deserves its own heading. One of the silliest things a first-time home buyer can do is fail to have it properly inspected by a professional.
Inspections and appraisals are two entirely different matters and you should be aware of this fact. Having an inspection performed can actually allow you to negotiate a lower price on the home if anything such as sloping floors, poor insulation or faulty plumbing should be discovered.
Many first-time property investors fail to see success because of simple mistakes that are easily avoided. Don’t give in to emotional buys, make sure you are factoring all costs into your budget, do the necessary market research and opt for a professional inspection to make sure your property brings you significant returns.
Planning on a second property? Perhaps you currently have spending potential and want to invest in something that will give you both peace of mind and passive income. A second property investment gives you financial benefits as the value of your property increases and the size of your second mortgage stays the same or reduces.
If you’re interested in a second property investment, you’ll be pleased to know that getting a good price on house and land packages in Perth, WA is now easier than ever with new communities and better transportation on the rise. Moreover, you don’t need a deposit to purchase your second home. This is because you can use your current home equity to buy the new property.
A line of credit lets you borrow against the equity in your current home and you only need to pay interest on the amount you get. This is called leveraging and it’s very easy to do, thanks to home equity.
The power of leveraging
As stated above, leveraging the equity in your current home to buy a new investment property is simple to grasp. The home’s equity is the difference between your current property’s market value to the balance of the mortgage. If you have owned your property for a few years, chances are that you’ve already built up a good amount of equity and this can be used to purchase the new home.
Researching before your purchase
Before planning to buy, take your time to research the property market. The slowdown in growth across most residential properties is an indicator of a good time for property investment. If you want to purchase a property for your children who are about to leave home, you can take advantage of the lower property prices as well as the first home owner grant boost of up to $21,000 to make a wise investment.
Proper research into your second property investment is just as important as it was when you purchased your first home. You need a good strategy. Are you looking to buy to take advantage of potential rising prices and then looking to sell? Or you looking to buy for the long haul? Whatever the case is, make sure that you’re buying in a suburb where the property is predicted to hold value and escalate in the future.
Assess your cash flow
A deposit is not necessary if you leverage the value of your current home. However, you still need to be in a position to manage the second mortgage. To minimize risk. Ensure that you’re in the position to earn enough money to cover both your first and second properties’ mortgages, and cover your living costs.
Buying a second house may be a good investment opportunity for you. However, it shouldn’t become a financial burden. You must plan your financial decision with some foresightedness. If owning a second property interests you, then getting a good price on house and land packages should be your primary concern. You may also consult a real estate broker/agent to help you make the right choice.
There’s an old saying that says, “with age comes experience.”
If that’s true, then the opposite might also be true – with youth comes inexperience. But when inexperienced youth, in this case millennials, become interested in investing, what forms of investing are a good fit for them as young people? Most would say things that take little knowledge or hands-on work, like stock market investments made through roboadvisors and the like.
The last thing you’d to hear is that millennials should invest in rental property.
Does Your Desire To Be Mobile Stop You?
First, let’s look at one of the reasons millennials may not want to own property in the first place, let alone rental property. Young people today trend toward staying mobile rather than tying themselves down to a place or a property. One reason for this is that not owning a home makes it far easier to move when you are trying to advance your career.
As a millennial, you can use this to your advantage by purchasing real estate as an investment rather than a place to live. You can do this while staying mobile to increase your own probability of moving up the career latter.
If you’re wondering how, take a look at Roofstock. Single family rental homes with tenants already in place is Roofstock’s specialty. They can help you get into the rental property market as an investment without you having to do the hands on management that sometimes requires you to live in the same area as the property you own. By choosing to let them manage the property for you, you can still remain mobile yourself and increase your career advancement opportunities.
Can You Afford To Invest In Real Estate?
Another reason many think millennials are too young to invest in rental property is because real estate can be an expensive purchase, which many millennials don’t have the capital to pull off.
If you are one of the young millennials thinking you may be too young to invest in rental property due to affordability, think again. There are a few ways you can get started investing in rental properties without having a ton of money to start out with, such as:
FHA loans – There are rules you must follow when it comes to getting a first time buyer FHA loan. However, if you live in the home for at least a year, it is possible to qualify for an FHA loan. The advantage to this type of loan is that you only have to come up with a 3.5% down-payment instead of the normal 20% a traditional bank loan would require. That can make a huge difference in affordability and how quickly you can purchase a home to live in for a year before turning it into a rental property.
Partnership Investing – If you are having trouble raising enough capital to invest on your own, consider joining up with a friend or family member. Pooling your money with someone else might be just what you each need to get started investing in rental properties. I would caution you, however, to make sure it is someone you trust to do business with. In addition, you might consider creating a contract to protect all those entering into such an agreement.
So, are millennials really ‘too young’ to invest in rental property? I say no. With enough drive and determination to succeed, almost anything is possible.
For more on real estate investing and how to get the best investment for your money check out these articles.