So how do you select and decide where you will invest and in what type of asset? And where do you plan to invest? Would you consider investing in a mutual fund? The most crucial thing is to do your own research and exhaust all possible better options before you settle down to what you think is the best.
Before selecting and settling, it is crucial to be informed of the following factors that shape the entirety of what you will invest in. These are just some of the facts that you need to know:
To what purpose are you investing this for? If your primary goal is to generate the highest revenue, you might as well choose the best and most promising location you can find. On the other hand, you should also question yourself whether or not you are open minded enough to bear all possible expenses attached to the property.
Who will be your potential partners? : Will you spend for that asset alone or will you pair or team up with someone? He or she could be a relative or blood related, or just a close friend or even just a recent acquaintance. There are risks involves here; relationships may be broken, ties may be severed, and the unfortunate thing is that it can ruin your business relationship as well.
What is your level of risk tolerance? There are different attitudes when it comes to investing: there are people who are risk tolerant while others are risk averse. You try to translate that to your manner of investing. Now, how averse to risk are you? If you don’t like to take risks, you might consider investing in a well known area like the Tel Aviv or even Jerusalem. If you want to take risks, you are tolerant of the unconventional areas like Sderot or Ariel or even remote areas in Israel, which brings a higher potential in generating profits, like investing in shares.
Will the funds to be used coming from your pockets? Or will they be from someone else? You should never fail to address this for it will be riskier if you have loaned it from a bank or from others. What might get wrong might hit you more that you expect.
What will be the risks involved? You should be aware of this because chances are, more often than not, you will be forced to face them someday.
What is the property’s feel? What is its nature? This is considered a hard aspect to define but to maximize gains, you should not disregard this.
Furthermore, these are just a gist of the topmost crucial factors that will influence the revenue that you can generate from your property:
- The property’s location. The nearer to the central and most urban areas, the more profitable. Useful landmarks that define the profitability of the property are hospitals and health centers, shopping malls, parks, educational institutions, and primary means of transportation.
- The property’s size. Properties are now measured in terms of square meters. Therefore, the bigger the land is the better potential of income generation.
- The property’s accessibility. The easier and more convenient access it has to strategic places, the better. The more accessible the property, the cheaper and faster it is to locate it. It could also be a potential commercial space in the future.
- The price of the property. The cheaper the property, the more flexible you are to charge the rent to others since you can stretch it down to the last centavo.
Considering those above, you should remember the things below. It would be investment sabotage to do the following:
- Don’t invest in a location where you feel is your comfort zone. You should be objective in selecting properties that are considered potentially lucrative. You should only consider if you feel comfortable in that property if and only if you plan to have it as your residence.
- Don’t rely entirely on your own pockets and financial capacity. It is a basic principle in investing that you should not place all your eggs in one basket.
- Don’t spend everything. Always leave a portion for emergency. Always keep a portion for unexpected expenses. Next thing you know, you cannot run your business because you are out of working capital.
Now you know what matters to consider in acquiring a real property, more specifically, a real property in Israel. In income investing, remember to be open-minded; again, to be able to earn profits you should be willing to take risks.