Real estate investment is a hot topic among smart investors as a lucrative venture. Overtime, investors have been able to scale through hurdles that could limit the reward on their investment.
As an intending investor, you should understand that real estate investment requires knowledge which is the ultimate power you need to get the best investment value. It is why you should know what to do and what not to do when investing in real estate.
These ‘dos’ and ‘don’ts’ are not essentially rules, they are simple guides to protect you from failed investment
In this blog post, we have highlighted five (5) essential dos and don’ts each to guide your real estate investment.
Do’s Of Real Estate Investment.
Due Diligence: This basically refers to obtaining every possible information about your intended real estate investment; landed property or assets like stocks. For real estate properties, conduct research on the market value, property type and title, acquisition cost, environmental issues, etc.
For other real estate assets such as stocks, do due diligence on valuation metrics, debt maturity profile, operational risks, etc.
Property Inspection: There is a saying that ‘Seeing is believing’ and in property investment, what you see should be what you get. Why rely on just a property listing image, when you schedule an inspection on the property by yourself or a representative.
Going for property inspection is one major step that can finalize your investment decision. You can check out the property condition to assess possible renovation cost, environment for possible flooding and its landmark.
Hire/Consult Real Estate Professionals: Involving services of these professionals can save you a lot of time, money and stress. They include
- Agent/Realtor to find the right property, researching market value, making offers, handling negotiations and closing purchase agreements.
- Inspector to thoroughly assess the overall condition of the property and provide a report including suggestions on whether to acquire or not.
- Lawyer to review all documents, amend clauses to your benefits and complete all legal formality required.
- Property manager to ensure the property remains in the best physical condition and handle any maintenance required.
Formal/Legal Document Assessment: To avoid being a victim of legal implications which are mostly non-negotiable, you must carefully review all legal documents involved. Get your legal counsel to review and explain the terms of acquisition, deeds, binding clauses, etc to protect your investment.
Stay Updated on Real Estate Information: Ensure to keep up to date with real estate market details, trends and economic situations that can affect your investment.
Don’ts Of Real Estate Investment.
Make Emotional Decisions: Every decision you make as an investor should be based on market reports, statistics, and proven numbers. Focus solely on facts and figures you have on the market rather than your current emotion.
Skip Any Stage in Acquisition Process: To make this easier, do not jump over any of the first four processes highlighted in the dos section. Every stage until the acquisition process is closed is very important and must not be overlooked. Skipping or rushing through any of the steps can lead to costly mistakes and jeopardize your investment.
Invest Beyond Your Capacity: Investors must realize that there is more to property investment, it goes beyond just acquisition cost. You must be able to afford other costs such as maintenance, tax, etc, that will ensure that your investment remains secured
Overlook Government Regulations and Tax Implications: Ignorance is never an excuse in not complying with policies and this can result in heavy penalties. Get an understanding of your investment legal and tax regulations to ensure compliance.
Neglect Property Management: One sure way to protect and extend the lifespan of your investment is through proper maintenance. This will help you avoid decrease in property value and also maximize returns on your investment.
Conclusion
By following the dos and don’ts highlighted above, you can increase your chances of achieving substantial returns on your investment.
At Novarick Homes and Properties Limited, we provide comprehensive support to our clients to help them make informed decisions and achieve their investment goals. Over the years, we remain a trusted partner in building a prosperous real estate investment with our range of projects including land and housing.
