The Ultimate Beginner's Guide To Investing in Real Estate Step-by-Step

Are you ready to invest in a space you can call your own? Let us give you some tips on how you can start investing in real estate investment through a bank housing loan.

Step 1. BUILD YOUR CREDIT

Unable to get approved for a new credit card loan? If you are wondering why your credit card application keeps on getting declined by the bank even though you were already able to pass all the necessary requirements, then the reason for this might be a Poor Credit Score.  

Looking for tips on how to avoid having a Poor Credit Score? We gather three things you can do in order to improve your credit score:

Start getting a credit card early and use it responsibly.

Getting a credit card as soon as you can is a great way to show banks that you are financially responsible. You will make a good impression every time you use your credit card in making purchases and paying them on time.

Avoid late payments.

This may be sound easy, although you might encounter some times in which you'll find it hard to pay your monthly dues either because of an emergency, financial incapacity, or even simply because you forget to pay it on time. In order to avoid this, make it a habit to pay your bills early or pay it twice a month. 

Pay off debts or keep them at a minimum.

Paying off debts is the most important factor in building your credit score. But if you find it hard to settle all your debts in just one payment, make sure to keep all your debts at a minimum or in a manageable amount. 

Your credit score says a lot about you—your payment habits and your responsibility in repaying your debts. But most importantly, it gives the bank the impression that you are qualified enough to borrow money from them.

This is also the reason why banks try to check out first your monthly income before they approve your loan or card application.

Step 2. SAVE YOUR MONEY

Saving money is important in real estate investment as we cannot do this if we have no money down and have a low credit score. These two are the most important factors in real estate investment. Approximately 5 – 10% downpayment is a must-have by obtaining a good income and having a good credit score.

Step 3. CONSIDER YOUR INCOME

Availing a space that you can call your own involves a lot of considerations, but the most important thing to consider is your monthly income or your capacity to pay. In order to know what's the best home model unit for you, you need to consider your age, income, and employment. 

Step 4. GET PRE-QUALIFIED

Before discussing this, let's know first what prequalification is.

Prequalification is an initial evaluation of an applicant to know if they are qualified. When it comes to buying a home without knowing your project or how much it will cost, you can affect your purchasing power.  

Step 5. DO SOME RESEARCH

When looking for the best property for you, you must always need to compile reviews related to your future investment. You can start doing so by looking at the available properties in your local area.

Here in Lumina Homes, our projects are available in over 50 locations all over the country—including the key cities and municipalities in Luzon, Visayas, and Mindanao—that's why every homebuyer and homeowner can have the assurance of our communities' accessibility.

You must also check the neighborhood and the property's location. You must also check the property's recent sales in the areas as these kinds of activities can give you're a better idea of the current sale price and how properties are selling.

Step 6. FIND A WISE DEAL

The thing that you must check when having a real estate investment is the price, as it is always important to know if the property cost is right to your budget and as an investment. It is also important to do research or even a small chitchat with the locals if the location of the property is good. You must create a list to consider before investing in a property.

One of the best methods in finding wise real estate deals is through word of mouth. The great thing about it is you can have access to the seller to know more about the best properties for sale in town that you might be interested in.

Step 7. DO INSPECTIONS

After doing your research—finding great deals and discounts for your preferred house and lot—the next thing for you to do is to inspect the unit. If you're serious about acquiring the property for sale, it is essential for you to be thorough about it. Having a maintenance check can save you from having a home-buying nightmare. And in order to help you out in doing this, here are some of the things that you need to check during a house inspection:

Check for water stains, corrosion, and mold.

You can try looking and checking the house's wall to see any signs of mold penetrations or water leaks, especially near the showers and baths. Although this is not a structural defect, it will be costly to repair. 

Assess ceilings for sagging

Check the ceiling of the property to see if there is any sagging by shining a torch towards the ceiling. This will help you to have a clearer view of whether there are any defects on the ceiling sheet.

Check the walls for large cracks.

The internal and external walls must be checked to see if there is any large crack on them. Property with a large size crack that is greater than 2.0 mm in width can already be a reason for returns as it must be inspected by a qualified building inspector.

Look at the external roof lines.

Check on the property's roofline if it is straight and free from any deflection. 

Step 8. CLOSE THE DEAL

Now you've already checked everything and the property that you're eyeing, it is time for you to start your real estate investment journey.

The first step is your need to pay the reservation fee and submit the reservation documents like two valid IDs and proof of income. 

Step 9. START RENOVATIONS

The most exciting part of having a real estate investment journey is the home renovations. We all love it! That's an undeniable fact that Filipinos are indeed Home Buddies. It's not just about customizing everything and maximizing your space but also about upgrading your investment. 

Through home renovation, you can add value to your home, giving you options to sell it at a higher value or rent it out. 

Step 10. RENT IT OUT

If you don't have plans yet to live in the property that you bought, you can have it rented instead. In doing so, you can try different property listing websites to make ads for your house for rent, such as Lamudi and OnePropertee.

And now, you are finally equipped to start your real estate investment journey. But, the question is, are you ready to begin your journey? The answer is yes, as the best time to invest is NOW!

Start your home investment journey with Lumina Homes now and discover the benefits of property ownership.