The real estate sector has proved to be a lot of successful people. No wonder so many people hunt for property units not only to live in, but also as investment assets.
However, just like any other type of investment, you must understand the ins and outs of the property world before you are ready to dive with hundreds of millions of rupiah in capital. Here's a clever tactic from Rumah.com for beginner property investors.
Make sure it's right for you
Are you alert enough to repair damaged buildings, from clogged toilets, broken gutters, or moldy walls? Property owners who own one or two houses usually do the damage to the building themselves.
The goal is of course to save costs. And if you don't like it or don't have the ability to do it yourself, then maybe this isn't the right kind of investment for you.
Paying Off Debt in Advance
Some investors may go into debt to start their portfolio as a businessman. However, it would be better if you avoid debt to start a business. At least, pay off your old debt first before starting to apply for a loan as business capital.
Unexpected needs in the future can become obstacles to running your new business.
Get Down Payment
Property investment generally requires a larger down payment than the first property buyer. This is generally determined by a number of housing loan banks. So, prepare more capital for extra mortgage costs.
Be careful with rising interest rates
The costs involved in housing mortgages may seem light at first, but over time, rising interest rates can become a new problem. It must be remembered, you must minimize the total mortgage installments so as not to erode monthly expenses.
Calculate the Profit Margin
Wall Street firms, often get profit margins ranging from 5% to 7% per year from the purchase of property because they have to pay employee salaries. On the other hand, the private investor should be able to make a profit of up to 10%.
Prepare for maintenance costs of about 1% of the property price each year. Other expenses, such as insurance, taxes and park maintenance, can also be included in the calculation list.
This is one of the most sensible investment options, both in terms of price, advantages, and clearly profitable!
Don't Buy Old Property
Maybe buying an old property and renovating it is tempting enough for you. However, if you are inexperienced, you might end up experiencing losses. Unless you have a quality contractor acquaintance whose service fee is quite affordable.
For that, choose a property with low prices but doesn't require a lot of renovation.
Calculate Operational Costs
In general, the operational account for your new property is about 35% to 80% of the gross rental price. If you set a rate of IDR 1.5 million for monthly rent and an operational cost of IDR 600,000 then your profit is 40%.
The easiest calculation is to use the 50% rule. So if the rental fee is IDR 2 million, the operational costs can reach IDR 1 million per month.