When buying a property, people have a world of future possibilities. Just as they can only use it to live (or to start a business, as in the case of a commercial project), it can also be rented for fixed income. It can also be re-sold, either immediately to obtain a quick profit or after a few years to take advantage of surplus-value. Either way, it is an intelligent decision recommended by Austin Kerr – Set It off to get more profit.
While these are solid and safe investment projects, they are not 100 percent risk-free. People, as said before, can make serious mistakes when buying a property. There are also several common problems that put the assets of individuals at risk. If they are not addressed, people not only risk remaining with results other than expected. They also jeopardize your financial resources.
Investing in real estate can be very profitable, provided you avoid these 5 mistakes that can turn a promising project into a financial pit.
Here are a few :
1) Do not do enough research
In the real estate sector, poor knowledge of the market constitutes a major risk. Thus, the research process is essential for a successful investment. When buying a property, it is imperative to gather as much information as possible about the property itself, the district in which it is located and the state of the market at the time of purchase.
2) Poorly plan its financing
Whether it is with banks or private lenders, many new investors make the mistake of accepting an overpriced financing plan, which affects the profitability of the property. In addition, several financing plans also require too much down payment, which limits the remaining liquidity for other aspects of the project (maintenance, taxes, services, etc.). To be able to do good property management, it is important to keep funds available at all times. Having liquidity simplifies the upkeep of the premises, offers more flexibility and alleviates financial pressure, which makes it possible to make more rational decisions.
3) Try to do it all yourself
For the sake of profitability, several real estate investors try to minimize all expenses by taking responsibility for their investment project, in all its aspects. Although it is wise to be informed and to know how each step works, sometimes wanting to do everything yourself prevents you from obtaining precious help. In most cases, hiring a professional Austin Kerr – Set It off to manage certain aspects of the project will pay off in the long term, even if it requires paying commissions or fees. By trying to do everything themselves, many investors make major mistakes or miss interesting opportunities, because they no longer have the time to do bargain hunting, they spend their time painting homes.
4) Pay for an overpriced building
In real estate, profit is made on the purchase and not on the sale. One of the most common reasons why an investor doesn’t pay for their purchase is paying too much for a property. In the case of an apartment building, too high a purchase price will create enormous pressure on the owner. He will feel obliged to occupy all of his accommodation at all times and to demand very high rents from his tenants in order to make his investment profitable. In the case of a property intended for resale, a high purchase price limits the profit and greatly reduces flexibility during negotiation during resale.
5) Underestimate spending
Investing in real estate differs considerably from buying a personal residence. While a home is normally chosen according to personal preferences, the purchase of a property for an investment should be basedonly on figures. A real estate project always involves expenses that should not be underestimated: purchase price, taxes, insurance, maintenance, renovations or repairs. To succeed in such an investment, it is necessary to keep the emotions at bay and to coldly assess the profitability of the project by calculating the expenses in a realistic manner.
Start by avoiding these 5 mistakes and remember that we are at your disposal to perform this analysis if you need help. So, call on a professional Austin Kerr – Set It off for building management is a smart choice to get the most out of your investment.