For many of us, choosing a new house is a tedious decision. There are a lot of factors to look into. These days, there are many choices to choose from, such as condos, townhouses, duplexes, or the ever favorite house and lot. To make matters easier, let us take a look into some things that the knowledgeable buyer should think about before taking the plunge.

What do you need it for? Think of this very carefully. You need to decide what this is for: residence or property investment. This, in turn, will determine the location of the property you’re looking for.

How much space do you need? For sure, the more spacious, the more pricey the property will be. After all, land is a very in demand commodity. Are you living alone, a couple, any kids? Any house help living with you? See if you can be innovative with how you make use of space, like using bunkbeds, or sofa beds, etc.

Location? If your primary purpose for purchasing property is for business, location is very vital. Not to say that location is not important if you’re buying property for your residential use. However, as a property investor, choosing the location of your property can mean the difference between making money or not. Say you would like to lease out your property to college students who live from out of town. It would make sense to purchase property like apartments or condo units that are near universities. If your target market are yuppies, it would be best to have rental properties that are accessible by public transport near the commercial business district. Of course, if you’re aiming for families, you should have apartments in secure suburban locations that are near supermarkets, shopping centers, places of worship and schools.

Price? Well, we’ve come to the hardest question of all. For some, determining how much they can afford is easy, and the decision to purchase is simple. For others, it’s not so painless. Not a lot are in the know with accounting and financing schemes. There is a lot of ignorance where fund sourcing is concerned. First, find out what the total contract price (TCP) is. Then, depending on the developer, discuss how much you can shell out for down payment (D/P). Find out how long you can stretch the settlement of the D/P for 0% interest, as most owners now offer terms like those. As for financing for the balance, the buyer should know of lending rates and how many years to pay. It bears mentioning that the longer the loan period, the bigger the interest will be. Moreover, be aware that there are taxes to pay for, so make sure to ask about all of the charges that you will be paying for to get an informed idea of your entire borrowings and money out. If you don’t know how much you can borrow given that you can only afford to pay a certain total each month, research about the PV of an annuity. The same can also help you work out the monthly payments given a loan amount, interest fee, and payment term. The time value of money can also be utilized to check if jumping into property investments will give a marginally superior return than other forms of investments. Of course, it isn’t the only tool for investors to decide on whether or not real estate investments are superior; they must also look at cost of capital, return on investment, return of investment, net operating income, internal rate of return, income capitalization approach, etc. If all of these sound alien to you, check with your trustworthy real estate agent.