Singapore has seen a surge in the number of people opting to invest in properties thanks to the economic growth the city-state has enjoyed since its independence in 1965. The prices of these properties have soared ever since then, bringing delight to the vast majority of real estate owners and developers.
Nowadays, it is common to hear of people whose financial success was largely based off buying a property at the right time. It is a modern take of the traditional “rags to riches” story we all love, with people generating income from condominiums and other properties they’ve bought in the past for low prices and selling it today for a whooping price of more than a million dollars.
It’s true how financial success can be obtained through investing in property, but it’s no piece of cake nor can you achieve it overnight. You have to start off with a well-crafted business plan of real estate management for Singapore condos that will guide you to the success you’ve been aiming for, as well as ask yourself plenty of questions to help you set and focus your goals in the long run.
1. What is your goal for investing in properties?
Before investing in a property, it is important to pinpoint your goal in order to determine if the rental property is a good fit for you. If you want to be hands on in regards to estate maintenance, ask yourself if you either want to do it as a side job or full-time. The latter might require you to quit your day job in order to allot proper time in the day for property management but weighing the pros and cons of each option beforehand will help you in coming up with a decision.
Nonetheless, holding a bought property for capital appreciation will generate a financial gain each month — which can then become a steady source of income for you.
2. Where will the property be located and how far is it from your current residence?
Take time in deciding how far away you are willing to have the property situated. For instance, you can set limits such as not buying a property that is more than 20 miles away from your current residence. Distance matters a lot especially if you want to personally keep track with the estate maintenance. If certain circumstances prevent you from doing so, you can always hire a condo manager who is nearer to the building to do it for you.
Calculate the costs you’d spend in commuting from your home to the property. This covers train or bus tickets, cost of gas needed, and the opportunity cost relating to travel time spent and potentially lost productivity.
3. How much will it cost?
It is financially wise to figure out how much exactly you’ll need to pay to make the initial investment for a property. You wouldn’t want to end up in a situation where you’d have monetary problems and miscalculations, which is why being financially precise helps. If you do not have the amount on your own, figure out a way for you to generate money for the investment over time.
You also have to anticipate monthly expenses and be realistic in coming to terms with the numbers. This includes monthly maintenance fees, taxes, mortgage payment, and insurance. If you opt to hire outside help such as a managing agent, then include the pay in the list as well. It is also ideal for you to anticipate how much your monthly income will be so you can rightfully decide how much can you charge for rent.
4. How will you manage the property?
Whether you decide to be the landlord yourself or hire a managing agent to do the job for you, it is important to leave your property in good hands. Allot generous time in screening potential candidates so you have plenty to choose from. Weed out the good from the bad in the interview process alone, and since the decision rests entirely upon you, try to choose someone whom you are comfortable entrusting your investments with.
Having a condo manager is a big decision. It is best to do your research and find the ‘right’ manager to work with, as he or she will play a crucial role in the success of your properties in the long run.
5. How do you plan to maintain the property?
Property management requires tending after issues and concerns raised by tenants, such as facilitating repairs and fixing certain parts of the building. If you are no good with tools yourself nor the managing agent, it is essential to discuss it among yourselves your options for hiring outside help to perform routine repairs and other maintenance duties like tending after the yard when it’s time to mow the lawn or shovel snow out of the way.
You might want to check on the list of contractors available in the area, or ask word-of-mouth recommendations from neighbors if they know someone fit to do the job.
6. Do you have a back-up plan?
Having a back-up plan in case your investment fails is not necessarily being negative about your future prospects. If anything, it is wise and practical. We never know what could happen to the real estate and property development market, hence having an exit strategy at the ready is better than having nothing at all. It is also encouraged by many to always come prepared in venturing into this field of business.
It is actually possible to achieve financial success in rental property investment, so long as you put your due efforts in the process as well. It is also wise to ask yourself the important questions first before venturing into the business. This will offer you insights of what you may expect, as well as give you a perspective on how to deal with property management.