Many people believe that investing in a real estate property is a relatively safe type of investment as the value of the property increases in time. However, it is also true that it has its own risks and you might face unpleasant surprises after spending millions of dollars. Thus, it is always recommended that you work with professional real estate agencies who can guide you in your journey to a new house. Here are some factors an investor needs to consider before buying a real estate property.
An old adage says three most important things about real estate are location, location, location. Many decades have passed and it still remains true. An elaborate research must be done on various topics: How is the demographic structure of the neighborhood? What are the potentials for employment? What schools are located around the property? What is the crime rate? Are there any services such as cabled distribution system or garbage collection? How about transportation hubs? Is it surrounded by decent infrastructure services?
2) Type of Property
What you need to consider depends on the type of property you choose. Are you going to invest in residential, industrial, retail or commercial real estate? Residential real estates are seen as the safest type since people will always need a shelter; whereas industrial, retail and commercial real estate are considered to be more profitable. You need to decide on the type of real estate and do your research accordingly. For instance, infrastructure services are more crucial for residential real estate meanwhile the number of the population is prioritized for the commercial type.
To find out whether there are any underlying serious issues such as a pest problem, mold, or roof damage, you need to inspect the property thoroughly. Often, the seller pays to fix the problem before you officially buy it or offers a lower price. Nevertheless, you need to be aware of such issues if there is any, to come to an agreement with the other party.
4) Investment Purpose
There are four main types of purpose that can be listed as
a) You are going to buy it to use for yourself
b) You are going to buy it to rent
c) You are going to buy it to sell (short term)
d) You are going to buy it to sell (long term)
If you do not clarify your purpose, you might suffer from financial distress especially if it is mortgaged.
5) Double checking
Always identify if the property is eligible for mortgage loan. Compare the information on the title deed and what you are informed of. Check whether it meets building code regulations such as earthquake building codes. These kinds of double-checking are crucial to avoid future misunderstandings.
Remember, there are people out there working in organized groups in order to give you the best service. Consulting an expert is the best thing you can do when making such an important decision. Find a trustworthy real estate agency to guide you during this whole process to keep yourself away from future complications.