An 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.
- 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.
- 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.
- 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.
- 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.
- 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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