12 Mistakes to Avoid When Looking For Investment Properties - Ratinah

Mistakes to Avoid When Looking For Investment Properties - One business that promises greater profits than other sectors is property investment. The property sector is not an easy investment to make. If a little miscalculation, investors will suffer losses.

12 Mistakes to Avoid When Looking For Investment Properties - Ratinah

 A lot happens among investors who fail the first time they try to get into this business. This failure occurred because many mistakes were made when investing in property. To avoid this and get the maximum desired results, you need to know some mistakes in investing in property.

Finding a bargain investment property on paper is only half of the process of property investment. The other half of real estate investing is going down to the property to examine the real estate investment property physically for defects either in terms of the construction and legal title and other liens that can be on the property. You do not want to spend lots of legal costs later to undo the bad lemon you bought into. 

This article will highlight five possible things to consider when searching for your next investment property.

1. Nless you find a property that is really run down and you want to tear it down to its foundations, you want to look out for properties that might have potential electrical and water piping problems. The reason why this is critical is that, wiring and water piping is usually hidden behind walls and other furniture fixtures and repairing them can be a very costly affair since you have to hack into the walls and run the piping and wiring if the problem is very serious. If you are new to property investing try to bring a electrical engineer along with you when you are doing some property inspection.

2. Foundation problems are usually harder to spot. When walking around the property, look for cracks appearing at the side of the house and the foundation that goes into the ground. Look for large unusual holes found at the side of the property and cracks on the exterior paint of the building. You might want to bring a civil engineer and a contractor along to figure out how much it would cost to fix the property if you suspect the repairs involved will be substantial. You can also bring them along to give a “grim estimate” to the house owner and bring down the cost of the property.

3. Roofing problems can be a persistent nightmare to you and your potential tenant if you are purchasing the real estate for tenancy purposes. When inspecting the house, look around the ceiling near the windows and around the edges of the walls to look for new paint or yellow spots or cracks with water in them. Most sellers would be smart enough to eliminate the water bubbles after a heavy rain when trying to sell the property, but it is always important to figure out if there is a major leaking roof which might cost you are lot into repairing it. Use this defect to negotiate the price of the property further if you are interested in the property.

4. Another reason why the investment property in question might be a bargain might be because there are legal problems associated with it. Common ones include, multiple owners that cannot agree whether to sell or not. Litigation here would be futile and you should avoid such property once you learn about it.

Another problem might be a lack of clean title. Did you know that the seller can be selling you only the building without the land or maybe there are existing tax liens on your property or some other liens that can prevent you from getting good title to the property? Spending some time chatting with a reliable real estate attorney to learn about common real estate problems in your area can save you lots of legal problems later.

5. Bankruptcy of your seller or one of the part owners of your real estate may depending on the legal proceedings of your state affect your ability to transfer title quickly. Most states make it a requirement that the receiver of the bankrupt has to agree so pay careful attention to the bankruptcy legislation of your state. That being said, sometimes the banks are willing to sell you at a bargain so as to recover the bad debts quickly so do your homework before purchasing such an investment property.

6. Improper purchase time Many new investors make purchases when the property cycle is booming. Actually, this is the most inopportune time, because prices are already very high, and when investors intend to resell, it will be difficult to find buyers who are seriously interested. Prices during peak times will be difficult to come down and compete cheaply.

Therefore, to work around this, you can take advantage of the time when property purchases are not too crowded or quiet. Make good use of the moment!

7. Buying in the wrong area, In property investment, the location factor is quite important. Not only related to the location, but also to the surrounding environment and the chosen concept. If you buy property in a residential area that turns out to be deserted, then this will backfire.

On the other hand, if you can calculate if the area will become lively and lively in the future, it will be an advantage. Investors will easily sell the property at a good price. Therefore, it takes instinct and foresight of investors to find out.

8. Not prioritizing the legal aspect. One of the most important aspects of property is the legal aspect, because it deals with ownership rights. There are investors who buy property without considering this, so when the property is already in operation, and does not have an illegal permit, of course the investor must bear the risk.

9. Ignoring maintenance, In order to maintain a good price, investors need to maintain the cleanliness and maintenance of a property. Most investors will not occupy the assets that he owns. However, there are also many investors who leave their assets unkempt, even looking dirty and dirty.

If the house or apartment he owns is damaged, of course this will affect the selling price. This will definitely be a big loss for investors.

10. Not observant in buying, Buying property for investment requires strong research. So far, there have been so many investors who are only interested in physical appearance. In fact, the investor must have a comparison of which properties he wants to buy.

There are also many factors that must be considered between one property and another, starting from location, access, facilities and so on. Therefore, buying property requires analysis so that the property can be sold at a high price and sells quickly.

11. Not making cost estimates, Not just property investment, any investment must be well planned. Many novice investors are confused because they do not make cost estimates. Therefore, do not let you start investing without preparation or long-term plans.

Make an estimate of operating costs and profits. You also have to know, how much capital is needed to be able to get profits in the future. In addition, you also have to take into account the additional costs including, the cost of electricity, water and building maintenance.

12. Not concerned with quality, Often, because they want to quickly get a big profit, an investor does not attach importance to the quality of the property. One example is to choose the cheapest building materials. Many investors think that consumers do not make this the main thing. In fact, if your property is damaged in the near future, your credibility as an investor will be at stake.

In conclusion, these five pointers can be used as a starting point for you to evaluate your property investment. Spend some time to think rationally about the properties that you have seen and see if they have any of the above flaws and consider if you want to continue purchasing them and whether the costs that you may incur in fixing them will justify the discount of the property to the market value. Above all, take massive action today and pursue your property investment dreams.

That's 12 Mistakes to Avoid When Looking For Investment Properties - Ratinah


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