To buy your first property, you have to go through a three-phase process: first, define your budget; this includes how much you can or are willing to pay and how you are going to save that amount. Secondly, state your objective and establish what characteristics you want the property you wish to have. Finally, devise a purchase plan, where you must project how and when you are going to carry out the operation.
The first step is usually the one that presents the most complications since, currently, it is difficult to have sufficient savings capacity to face the purchase of a property. To face it, we recommend that you adopt a long-term view that takes into account the accumulation of capital and the investment of financial assets, with which you can achieve, within a few years, the purchase of your first property.
When defining what your ideal house or apartment will be like, you must take several points into account; they include where you want to live, what characteristics you want your home to have (number of rooms, quality of the building, size, etc.) and what price you can pay. This stage usually generates the enthusiasm necessary to undertake your savings plan, but remember that you must also take into account your limitations so that you do not end up looking for properties that you cannot afford.
The process of buying your first home ends when you finalize your plan. In it, you will define what real estate you are going to acquire and how you are going to pay for it specifically. At this stage you can use resources such as loans or mortgage credits that can make a seemingly impossible transaction feasible. Keep reading if you want to discover how you can buy your first property.
What are the benefits of buying a property to rent out?
Although the purchase of a property represents the beginning of a family asset, it can also be considered an investment, as there is the opportunity to rent and obtain a profit from it. This type of real estate transaction brings with it many advantages and requires a first push to start a potential business.
Before choosing this activity, it is essential to consider that the investment will be long-term, which could generate liquidity problems. Likewise, it must be taken into account that buying to rent and paying a mortgage loan with that income brings with it a great responsibility, as there are no short-term profits.
Now that you know the implications of this type of investment, let’s move on to the benefits.
You can use the rent money to cover your monthly mortgage loan payment, so the house will “pay for itself,” and you will not have to shell out money for this purchase—without leaving aside the initial expenses of the mortgage loan.
If your income is greater than the monthly payment, you must pay for the mortgage loan, which you can repay before meeting the term. To do this, we recommend choosing a financial institution that does not charge for advance payments, such as Smart Lending.
The purchase of a property also generates capital gains and return on investment. The capital gain is the increase in value that a property generates over time, while the return on investment calculates the time it will take to recover the investment and whether the purchase is profitable.