Being cautious while Purchasing and Investing in Real Estate would be helpful in the future. Don’t go overboard and be careful not to repeat the same mistakes that many before you have committed.
Real estate is a lucrative investment. But a wrong move could backfire too, resulting in financial setback. It would be advisable for you to first get well versed with the trends and nuances of the real estate market and only then enter the arena. If you are eager to test your luck in real estate, you would do good to avoid costly mistakes that people usually do while making a deal.
LACK OF PROPER PLAN
Novice investors lack a proper plan while Purchasing and Investing in Real Estate. Searching for a good property after forming a proper investment strategy is the right way to do things. Many buy a house because it seems to be a good deal and then tries to fit it into their plan. It is the wrong approach. Instead of buying a property first and then making a plan for it, it is better to first go through the finer details to work out a complete strategy and then go around looking for a good property.
LACK OF ADEQUATE RESEARCH
Every type of real estate investor, whether it is a personal homeowner, a future landlord, or a land developer, should take a decision regarding real estate purchase only after conducting the proper due diligence. There are research considerations which should be taken into account. Here are some questions that a prospective investor would do well to ask:
* Is the property located in the vicinity of a commercial site, or will long-term construction be occurring in the near future?
* Is the land located in a flood zone or in a region prone to radon or termite problems?
* Has the house any legal issues that will need to be addressed?
* Which parts of the house would need to be replaced?
* What is the reason for property sale?
* What did he/she herself pay when purchasing the property?
* Are all the bills paid? Is there any dispute regarding these?
* Are water supply and sanitation systems in place?
WE KNOW ALL ATTITUDE
Many people grow over-confident and suffer setbacks. You could have settled a number of deals in the past that went well, but every process is different and hence needs to be tackled differently. Especially, in a down market, things can be least expected to pass smoothly. You should try to tap every possible resource and seek help from local experts that can help you make the right purchase. Your list of the experts should include an experienced real estate agent, a competent home inspector, a handyman, a good attorney/lawyer, and an insurance representative. If there are any flaws in the property or in the locality, these experts would alert the investor.
The biggest reason investors don’t make money is simple: They pay excessively for the purchased property. The money is locked in immediately once the investor buys the property. A mistaken analysis could end up in over-investment. When he would try to resell his property, he would not be able to make a supposed profit. So just be careful that you do not fall in the same trap. Paying too much and locking up all the funds in an erred property deal will not leave you with enough cash to redeem yourself.
MISJUDGING CASH FLOW
If you plan to buy, hold and rent out properties, you need sufficient cash flow for maintenance. Managing property is expensive and the owner has to incur expenses like mortgage, taxes, insurance, advertising costs, etc. Investors must have a proper budget to take care of all these expenses or end up having their asset turn into a liability. Most investors have no idea of how a property manager works. So they commit mistakes and suffer losses as a result.
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See the Picture Below for more information. Call the following Numbers to secure a property +234 7060-934-399