When a profitable turnkey real estate investment opportunity comes by, it can be hard to avoid it. After all, real estate is definitely one of the safest asset classes in existence. And the prospect of having the property managed by a set of professionals while you profit from renting them can be extremely tempting. However, one should not blindly put their hard earned money in real estate. Instead, you must analyze all such offers carefully. Below we look at four things you should watch out for when investing money in such properties.
The first thing you should do is to check all the relevant documentation regarding the property. You should do a detailed study of the appraisal report of the property and also validate the ownership claim. If you do not look for such things, then there is a good chance that you might become a prey to someone else’s fraudulent plans. If the necessary documents are not in place and the seller seems not too keen to provide a solid proof of ownership, then that is definitely a seller you should never do business with.
Check out the history of the seller and make sure that there are no incidents in which they were accused of fraud. It can be anything from charging a very high price for a cheap property, or outright lying about ownership. If you notice any such incidents, then that is surely a red flag. And no matter how charming and pleasing such people appear to be, it is recommended that you avoid dealing with them.
Quality Of Renovations
Look at the renovations they have done on the property. Have these renovations added value to the property, or are they looking shoddy and out of place? A bad and improper renovation of a property is a sign that the seller just wants to get the property sold off as quickly as possible and not worried about the investor. As such, you should only select homes that have been renovated in a way that increases its market price and minimizes any signs of how aged it is.
Double check the prices of homes in an area and compare it with the price the seller is mentioning for a particular property you are interested in. Oftentimes, a seller can quote a very high price and you might continue thinking that it is the original market price. This is especially true in situations where the housing market is facing a slump or strong recession. For example, during a severe financial crisis and economic crunch, homes might actually be available for rates starting from $5000. And when a seller quotes you $30,000, you may be surprised as to how cheap the home is valued at and may decide to buy it. By doing so, you will be spending five times more money in purchasing the property. Such incidents can be avoided if you thoroughly check the rates of real estate in the region.
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