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Important Questions to Ask Before Investing in Real Estate Property

09/09/2021 10:59 AM
Investing in real estate is not a decision that should be taken lightly. You are pouring your hard-earned money into something that is tangible, but not infallible. 

While the marketplace for real estate business is booming, there are certain risks that come with real estate investment that are unavoidable, such as things that come under the force majeure clause in legal documents. For example, there is really not much you can do to protect yourself against a meteorite rain. However, there are risks that you can manage or mitigate such as mould and structural stability problems. 

Let us take a quick look at some of the important questions you need to ask out loud (and get clear answers for) before you start emptying your bank account on real estate investments. 
How much can I afford to spend on real estate? 
FIrst, you need to fix your budget. Figure out exactly how much you can afford to spend on the property you plan to invest in. You should not expect any financial benefits from a property immediately, as this can take a while, sometimes even years. So, always leave a buffer while setting your budget. 

While purchasing a property, you are not simply buying the land and any related superstructure. There are also some additional costs you need to consider as well, such as property taxes, homeowners' insurance, maintenance charges, homeowners’ association dues, in addition to any renovations you deem fit for the real estate property before you can move in. 
Why is the seller putting up the house for sale?
Do not get excited just because you see that a property you are interested in is up for sale. Try to get clarity on why the seller is leaving. The reason for doing this is to ensure that you do not get burdened with a property that is more of a liability than an asset. 

Think about it this way, if the property is so great, then why is the seller leaving it? Of course, you need not jump to the worst conclusions straight away. Maybe it is not a rotting basement structure or an infestation of rats that is making the seller move out.
Is the property situated in a disaster-prone area?
Natural calamities are not avoidable nor controllable by human intervention. There are, however, certain precautions you can take to ensure that the risks associated with such unpredictable events are reduced. 

Before buying a property, check whether the property is located in a natural disaster prone area. If so, you might want to reconsider, even if it comes at very cheap prices. If you weighed the pros and cons and decided that the investment is still worth it, then you need to get as much information about the geological conditions of that area as possible. 

When was the last time there was a natural disaster nearby? How was it mitigated? What was the impact of that calamity? How often is the area affected by natural disasters? Is the surrounding soil stable enough (you can get this verified using construction engineers who will test the soil density and compactness for you).
What were the major renovations done to the property recently? 
Now, this is important to ask, because the property may look good from the outside, but be full of structural stability problems inside. It’s not hard to cover up the structural issues with a pretty facade right before putting the property for sale in the marketplace.

Once you purchase a property that is internally damaged, there is little you can do with it, except maybe try to unload it on another unsuspecting soul’s head. 
How old is the property? 
Getting a rough idea about the age of the property is not enough. You need to find out exactly how old your property is so that you can assess its value and age-related threats accurately. 

As a property ages, even if the price of the land goes up, the price of the superstructure almost always experiences depreciation. You will need to know the age of the property so that you can also gauge how old the appliances and housing systems that are in place are. 
What is the neighborhood like?
If you plan to move into the property you are going to invest in, it is important that you know the kind of environment you will be living in. 

What is the reputation of the neighborhood? How well have they kept the surrounding areas? Will your neighbours be amicable and easy to get along with? What are the essential amenities that are nearby? Are there important facilities like schools, hospitals, and supermarkets nearby? 

In conclusion, it is always better to think twice before leaping when it comes to investing in real estate. With the right research, you can easily get the most out of the marketplace for real estate business. You can also enlist the help of reputed real estate solutions providers like Zeekin to help you get the most value for your money.  
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