I often hear people say they want to invest in real estate, but many do not know what to do or how exactly to go about the processes. It takes more than having interest, or a wild dream to own a property. Being informed plays a vital role in ensuring one makes the best business decision.
Although there are different categories of properties (flat buildings, duplex, land etc), having a basic knowledge of what real estate investment entails can help one navigate through the processes.
1. Learn how to spot a great location
For a smart choice of location, one must be able to tell areas with the high potential of developing over the next few years. It is important to do your homework, this will not only help you in making informed decisions but the yield – financial and social – will also be invaluable. Is the town becoming dense and overpriced? Then it is time to pay attention to the outskirts. Over the last few years, parts of Ogun state close to Lagos have recorded a high level of immigration, an increase in infrastructures, and more construction of residential buildings and companies.
This post on how to spot an up and coming areas will help you gain insight on how to make good judgement concerning real estate. You don’t want to be left out. Likewise, in learning about the future of a location and its prospects, it is also important to consider the history of the house, land or area. Is it usually flooded during the raining season? Is the area prone to social, political or religious riots? Do your research.
Study the prices of properties in the neighbourhood and their trends. You should also compare them with the price listings in other areas. This will give you an idea of what is mostly on demand, their price range and the monetary value you place on your property. Pricing demands that one does thorough research, this enables you to have a better understanding of the concepts of the business. You will get to know about the locations that best suit your needs.
3. Renovations are not directly proportional to monetary returns
Polishing up a building may not necessarily increase the value. The knowledge of this will save you from unnecessary heartache. In a bid to create good impressions and increase the chances of selling the property, some renovations may need to be made. However, buyers have different tastes and no amount of renovation will make a person buy what they really do not want. But it is necessary to make effort. Keep the property clean, get rid of odours etc. Yes, upgrading the building will make it more appealing to buyers, but it may add only a little or nothing to your wallet. You will not always get back every amount spent on renovations. It does not mean you will be at a loss either. The basic things are to maintain a balance between the two.
Ability to negotiate is one of the skills that differentiate successful business owners from mediocre. Yes, we know you have the money and can’t wait to become a land or house owner. But perhaps that property can be purchased at a lower rate? This also works the other way round. In selling, you should not be in haste to let go of a property. You may get better deals that it deserves. It’s also okay to listen to potential buyers, you may not always get to sell the property at the price you wish. And that’s okay.
5. Real Estate is real business
There is the temptation to be lax about property investment as it is not a ‘day job.’ But the level of commitment should be as much. Get information, be diligent in asking questions and finding answers. You’d be surprised at how much many people who want to invest in real estate don’t know, not even the basics! You really don’t want your money to go to waste. There are real estate terms you may also need to familiarise yourself with, this may help you in dealing with agents and buyers.
6. Put your money where your mouth is
If you cannot confidently talk about a property you intend to sell to someone, something might be wrong. Integrity is essential in everything, real estate business included. If something is not right with the building or land, if you are going to have issues speaking about it when it’s time to sell, maybe you should not buy it in the first place. Real estate business thrives when there is good marketing, that is one of the concepts one must not take for granted.
7. Put it in writing, always
This is basic! Whatever you do, ensure you have documents as a proof. Real estate is a serious business. Although legitimate, many are in it to take advantage of unsuspecting persons. In choosing a real estate agent, there are companies that can assist you to do that. There should also be legal documents at every point to bind your agreements with other people.