What to Know Before Making Your Very First Property Investment

Since time immemorial, the scales have been tipped against women’s favor — from workplace discrimination and constant condescension from colleagues, to nonsensical dress codes and casual harassment. While women have started to put their feet down and rewrite the patriarchal protocols of history, there remains one more gap that needs to be addressed.

The unspoken gender wealth gap might not get as much media mileage, but that doesn’t mean it isn’t quietly eating away at women’s chances for a more stable future. Time Magazine estimates that women keep 71% of their assets in cold cash, while men hold 60%. The 11% difference doesn’t sound so dramatic on paper, but the real cost of the investing gap over a 35-year career span could clock in at more than $1 million. This leaves men with more purchasing power, maintaining their grip on the world’s private wealth. For women, that could mean the difference between being financially empowered for tomorrow, and being relentlessly dragged down by the undercurrent of day-to-day living costs.

According to Christine Ross, head of wealth advice at Handelsbanken Wealth Management, men have historically earned more than women from an earlier stage, giving them a head start in investment opportunities. Moreover, women fall even more behind when they go on maternity leaves and other situations out of their control. “This means that high-earning men have been quicker than high-earning women to reach their lifetime pension allowance — leading them to look into alternative savings and investment options available to them,” Ross explains in an interview with Financial Times.

So what’s keeping women from taking the reigns of their assets, as if financial literacy was some sort of sorcery written in a language only men can understand? Market Watch chalks it up to traditional toxic norms and gender roles. Women were just not raised to think of themselves as investors — it’s always the grey-haired men in fancy suits. At home, making money was dad’s job, and so the task of maximizing finances is left to men.

Fortunately, the tides have started to turn. Ross notes that as equal pay issues are being addressed and childcare is becoming increasingly shared between both parents, more women are seeking financial education and managing their wealth. At this pace, a future wherein women are financially equal to men is entirely possible. This allows them the autonomy to plan for the lives that they want, buy homes, pay for schooling, pursue careers, and retire comfortably.

So if you want to make your money move, property investment is worth looking into. Compared to other investments like stocks or shares, real estate is a more stable option. Property is always hot on the market, and can generate ongoing passive income. The Balance suggests that it can even be strategized to build considerable wealth over time. This is especially true in New York, particularly in places like Manhattan and Brooklyn, where property prices have stable appreciation. In the past, it has ranged from 7% to 15% annually because of the endless opportunities for capital growth and a flourishing rental market.

All this might sound simple enough, but achieving financial freedom, as we all know, is easier said than done. Besides having to put out a significant amount of money upfront, there are many things to consider, like maintenance costs and handling tenants. Here’s how to get started.

Consider your goals

Before learning how to invest, first establish why you’re investing in, in the first place. Surely, all investors want to grow their finances, but how does it play into your long term and short term goals? Are you planning to put your properties up for rent? Are you looking to sell for profit? These are questions you may want to ask yourself so you can set the foundation and come up with a concrete plan. Becoming a landlord, for example, takes much more commitment and an active effort to be involved with your tenants everyday.

Consider the suitability of properties for your investment portfolio. Most investors visit properties door-to-door while keeping an eye on comparative market analyses. You can then get calculation tools needed to determine the best profit potential among your property choices.

Expand your network

You don’t have to know the nuts and bolts of investing, but it does help to talk to people who do. There are many networking events and real estate groups online that can link you up with other working women in the field. Get to know them so you can tap into their individual networks and forge lasting business relationships — from mortgage brokers and attorneys, to companies and friends. Ask as many questions as possible and get different opinions to ensure that all bases are covered.

Know all the requirements you need

One thing that intimidates people about property investment is the pile of paperwork required. This is inescapable, so it’s best to avoid cramming it and to make sure all your papers are spotless. For 33-year-old landlord Denae Patterson, she had to go through an intensive process before getting her property loans approved by the bank. “First, I needed to show good credit. My credit was decent, in the high 600 range. The bank wanted to see consistent and solid income; holding a full-time job satisfied that,” she shared on The Frugal Feminista. However, the hardest part for her was having to change her status of her student loans from “forbearance from economic hardship” to “in school.” “I actually ran around getting recommendations letters, quickly applied for a M.S. program at Drexel University and convinced my job to pay for it. I signed up at least half-time, printed out the enrollment form, and sent it to my mortgage company,” she continued. Though you may not have to do the exact same things, it’s important to know what requirements you need to fulfill your investment goals while considering your current financial state. When the time comes for you to shell out, it will be smooth sailing from there on.

Assess your leverages carefully

Borrowing money for leverage can help increase the potential returns on your investment, but there are potential pitfalls to this strategy. Leverage can be helpful, but the trick is to assess all areas of risk. Savvy investors know to take this with a grain of salt.

Understand your mortgage

Another tricky realm to navigate is the world of mortgages, which is an example of leverage. Its terms can differ depending on state to state, so be sure to read up on the ones that are important to you and your investment. Here in New York, Yoreevo notes that the state imposes a tax on the privilege of recording a mortgage on real properties — namely, condominiums, townhouses, multi-family properties, and the like. It also only applies to new mortgages for acquisitions. Since the NYC mortgage recording tax takes up a huge chunk of home buyers’ expenses, you must understand exactly what you’re getting into. Different types of mortgages have their own benefits and risks that are crucial to your investment’s success. Typically, investors have to have 20% of a property’s sale price to be eligible for an investor mortgage. Find one that provides good interest rates, and be wary of adjustable rates and balloon investment mortgages.

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