Property investment is probably one of the most saturated disciplines in the field of investment. There is always one development or another taking place around the corner.
Housing is an item that is always on demand and is normally an area that is constantly short of meeting the needs of different demographics all over the world; there is always room for more property development. It is usually on every government’s main agenda and it includes the incorporation of private investors in the sector.
This is because property is viewed as a good investment because:
- It has a guaranteed appreciation value except in very unique circumstances.
- It is a hustle-free investment; there is not much monitoring needed once the initial investment is made.
- The property can be used as insurance for other projects.
- It is relatively easy to get mortgage financing than other kinds of loans because of the unique security that the investment itself provides. There are fewer hurdles when it comes to property loans.
- You are able to make your own decisions concerning your piece of property.
However good the venture looks there are always questions and concerns raised by anyone investing in property and especially first time investors. Here are some of those questions answered.
How should the ownership be structured?
There two main options here: The property can be registered under your name or under a more corporate structure such as a limited liability company.
The former is okay if the property is for personal occupation and will not be used as security to finance other engagements.
However if the property is meant for commercial use it is always safer and advisable to register a company with limited liability because of the business aspect of the investment. This form of registration is simply meant to cushion you from any sour turns in the business.
What kind of structure should I invest in?
Whether you are buying or constructing a property it is important to primarily focus in the financial resources that are comfortably available to you. It will also be determined by the end use of the structure.
A business structure is more elaborate in design especially to meet legal requirements and for the comfort of the users.
A personal residence is more customized to suit the needs of the owner and may be simple or accessorized depending on taste and finances.
What kind of levies will I have to pay?
This part can get a little complicated as there is a variety of property levies and taxes by different arms of government.
Such details can be obtained at the local government housing office; it is very important to be up to speed with the required payments and when they are due. Some of them are one-off payments while others are monthly and annual payments.
Delays in such payments normally lead to imposition of unnecessary fines that accrue interest over time. They could actually lead to the auctioning of your property.
How long is my deed valid?
Many deeds are valid for around 125 years but can be renewed after that. However this varies in different jurisdictions and it is a piece of information you will have to get from local authorities.
There are many other factors to consider when investing in property and it is advisable to seek legal services in case of any doubt.