Buying the first investment property can be challenging for many people. However, with rich knowledge and experience from Robert Kiyosaki’s Rich Dad Poor Dad, investors can better select suitable properties, evaluate values, make investment plans and execute properly. This article will elaborate on the key steps of purchasing first investment real estate based on rich dad’s philosophy.
Assess personal finance condition and risk appetite
The first step is to fully assess your current personal finance situation, including income, expenditure, assets, liabilities, and risk appetite. This helps set a proper budget and guidelines for the property investment. For example, investors with low risk appetite may want to buy cheaper properties that generate stable rental income.
Research local real estate market
Conduct thorough research on the local properties market to understand price trends, transaction volumes, historical data, etc. Focus on neighborhoods and properties with good fundamentals and growth potentials. Also learn about relevant government policies, infrastructure plans that may impact housing demand.
Inspect potential property in person
Physically visit and inspect the potential buy-to-let property, check all facilities, structure conditions, neighborhood environment, transportation convenience, etc. Talk to local agents and inhabitants to collect more insider information not in listings.
Evaluate property based on multiple factors
Assess the property investment value from multiple dimensions – intrinsic value, market value, mortgage & interest, rental income potential, taxation. Make prudent assumptions for key factors like future rent hike based on research. Run analysis to determine cash flow, ROI metrics under different scenarios.
Make realistic investment plan
Based on above studies, make realistic plans regarding budget, target neighborhood & property type, renovation needs, financing methods, holding period, selling alternatives, etc. Have contingency plans to deal with changing market conditions and emergency situations.
In order to successfully invest in first rental property, investors need to fully assess personal conditions, research target market dynamics, evaluate property values from different aspects, and make realistic yet adaptive investment plans based on rich dad poor dad’s time-tested philosophy.