Buying a property: Underestimating your expenses (Trap 1)
When you buy a property that is too expensive, it is difficult to turn it into a profitable investment . The rental price you offer may not be enough to cover the repayment of the credit. The profits you can potentially make depend on the price at which you buy your property. Keep in mind that you need to align with market prices by adding value or creating a specific demand for your offer.
How to find a good deal in real estate
Finding a good business ensures long-term profits on your investment. To do this, you must create an alert system that informs you of the availability of real estate in the targeted area. It can be a subscription to a newsletter, an inscription on a website devoted to real estate, a regular contact with real estate agents of the sector ….
Buying real estate: Buying under a market
To check that the purchase price of real estate is not high compared to the market, you can inquire about selling prices in your environment (agencies, print media, oral press, Internet …). This comparison will take into account equivalent criteria such as living space, surface area, furniture, location, luxury, the presence of a park, a garden ….
This information will be provided to you on the advice of an expert or a real estate agent. Sales near the site give you a preview of what you want to acquire. The duration of sales transactions is still an indication of the level of interest generated by customers.
Well negotiate the price of his real estate property
First of all, it should be noted that the prices at which the sales announcements are made do not correspond to the purchase price. Negotiations in real estate, are used to lower the prices of goods. The price of each property is also related to its mode of exploitation. The decision to buy a principal residence is most often emotional. The buyer falls in love with good and projects easily. He is likely to buy the property above its real value. However, exploitation as an investment is rational and based on calculations (return on investment, rental income). Evaluating your investment by determining its profitability allows you to have control over your project. For this, find the best offers by comparing prices and other costs inherent in its acquisition, resale prices and costs of any renovations that are the responsibility of the owner of real estate.
Buy a property that does not fit his project (Trap 3)
By buying a property that is unsuitable for the market for which it is intended in terms of target, location and price, you will have a hard time making your real estate investment profitable. Studying taxes, administrative and financial constraints that regulate the real estate environment will help you make purchases that match the profile of your project. You have the opportunity to make a mid-range real estate project (studio furnished or not) for students, or high-end (large apartments or villas) for wealthy families. You can also choose to invest in large cities or economically vibrant cities. However, we must avoid investing in cities created for an occasional situation. They may disappear or be deserted after the cessation of the interest for which they were created.
The location in real estate
Indeed in real estate, there are 3 remarkable points: the location, location and location. This is an asset in the profitability of real estate projects. For each customer, a type of products: reserving their project to a type of client because of the rental demand helps to ensure better solvency of tenants.
Unpaid rent in real estate
From the outset, the sorting of tenants of your property or risk exposing you to the irresponsibility of some tenants that could harm you. Unpaid rents , the deterioration of your property, ethical problems can distress you as the owner and affect the repayment of your credits and the loss of the value of your property.
It would be more convenient for you to have your property vacant than to meet problems of unpaid rent. Selecting your tenants is to rent their property to those who will pay their rent in time, maintain your property and stay there for a long time. This saves you extra costs of renovation and allows you to repay your credits.
Before establishing the lease, check the tenants’ creditworthiness, their socio-economic status and their legal background … Learn about them and validate with them the rules of operation.
To this end, to launch your project in real estate, please clarify the motivations that led you to this specific type of investment, the benefits and constraints. This will allow you to keep a successful entrepreneur mindset and take the right steps.