Blunders in Buying an Investment Property

investment-propertyAn investment property is considered to be one of the best things that one can do to make their money grow. Also, it is one of those material possessions that one acquires in their lifetime that has a potential to grow in value.

However true this may be, it would be false to conclude that all property purchases are beneficial. Many of them actually do more harm than good no thanks to slip-ups and blunders that people commit in their acquisitions. Mistakes are costly to say the least.

To avoid suffering from the same fate, here are the different blunders in buying an investment property that one should steer clear from.

  1. Buying something one has no need for

Every investment has a purpose otherwise it shall become futile. Why buy a house when one has no plans of living in it, selling it for profit or renting it out? We don’t waste money. We all know that’s hard to find and only someone stupid shall do otherwise.

  1. Overspending beyond capacity

This is where the importance of planning steps in. Budgets are necessary to make sure that all needs are provided for and that expenses are accounted for and do not go overboard.

  1. Focusing solely on visuals

Appearances are important because who would want to buy a dilapidated and deranged looking property? Still, one has to look way past physical beauty when making such an investment. Focus attention on things like structural integrity, location suitability, safety and security, depreciation costs, appreciation potential, market value and the like.

  1. Failing to choose an apt location

Location is a very important aspect especially when buying an investment property. However, the suitability in location depends primarily on the function and use of the asset. For example, the location standards for buying a home shall be different from that when one buys a commercial office space. Remember however that convenience should be a primal concern when it comes to location choices.

  1. Forgetting about ongoing costs

This is perhaps the most common blunder that people commit when buying an investment property. The reason is not surprising too. Ongoing costs, that of repairs and maintenance, are not part of the initial expenses that one needs before and during the acquisition process. This occurs when one already owns, manages and maintains the asset. If they come at a staggering price, it will become burdensome in the long run which isn’t good financial-wise.

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Requirements for Commercial Property Auctions

commercial property auctionCommercial property auctions are no longer new. This fast paced and highly competitive acquisition process has long been one of the best ways for investors to improve and better their portfolios. But just like any real estate related event, participants are expected to have a certain set of requirements to not only participate but also to truly earn benefits from it. Singerviellesales.com  did some research and we’ve narrowed down the list to the following six major requisites.

  1. Experience – No one is born a master. We all begin as amateurs so what’s with this requirement? You see, even experts would say that experience is a tool necessary to win at auctions. As a matter of fact, first timers are encouraged to merely observe and learn during their first auction and not actually go into the bidding war.
  2. Research –See to it that one researches on the organizers as well as the properties being sold off. Before the event itself, brochures and listings are likely to be made available so one is never really left in the shadows until the bidding begins. Look up the property and assess its characteristics and features. Visit it and have it surveyed to avoid the turmoil that would be if one wins the bid on an asset that turns out to be not as great as one assumed it was.
  3. Budget – Proper expense allocation is always a matter of importance. No one has an endless supply of cash after all. A budget should help see to it that no resource is wasted and that all needs are provided for.
  4. Financing – Never attend commercial property auctions without the cash. That would be outright silly. Security deposits and upfront down payments are necessary for a winning bidder. Remember too that contracts here are legal and binding. Come prepared.
  5. Limit – Overspending is a classic blunder when it comes to auctions. Some people tend to be overwhelmed and so into the bidding that they are likely to spend more than what they are capable of or even pay more than what an asset is really worth. That’s no smart investor.
  6. Courage – Lastly, participating in commercial property auctions will require a whole lot of courage, guts and audacity. There has to be firmness and certainty when one raises their bid. As much as these events are run by numbers, they too are a psychological war on their own. It’s clearly not for the faint-hearted.