First-time real estate investors have a number of challenges to get over especially in a slow market. Now, even in the current Covid-19 pandemic, some people may find it an opportune moment to purchase property; perhaps so they can sell it later.
But is there any advice that you can get to make it safe to purchase a home, and avoid the classic mistakes? Read on to learn more.
Consider the research you do before purchasing a car, or other important item. Now, that same zeal and determination should be used to gather information about the house you want to purchase, the neighborhood the house is located in, the price range, the condition of the house, and any other important piece of information. There are different considerations with every type of investor; so to start things off, are you a hoping to become a homeowner, future landlord, land developer, or a flipper? This will help you ask all the right questions as you shop for a new house. But how do you buy a house safely during a pandemic?
Make sure you only meet with people who’ve been tested
If you’re looking to invest in a new house, it’s likely that you won’t pass up a chance to buy a decent house because of the ongoing pandemic; however, it is important that you follow safety guidelines and get tested for the virus before going anywhere. And just as important, you should only interact with people when wearing protective material, and that means putting on a mask, and keeping a safe distance with people. When you hire an agent, be sure to discuss your concerns with regard to the ongoing pandemic, and how the two of you can ensure that safety is observed. Check which parts of Canada have been cleared for movement, and when possible use online tools to communicate and view properties (virtual showrooms) before making a decision to travel.
Before you proceed to contact a seller, you will need the services of a real estate agent. This person will help you ask the right questions so that you don’t get tricked into buying the wrong property. Here is a list of issues that a would-be investor should look into before deciding to buy a new house:
- Is there any commercial work going on in the vicinity of the property, or will there be any construction happening in the near future?
- Is the property located in a flood zone, or in an area that’s considered problematic? Find out if there are termites, radon, or other problems.
- Find out whether the house has a foundation, and if not, whether special permits need to be issued for the same.
- What are some of the appliances that have been restored in the house, and how old is the plumbing?
- How much did the owner pay for the house, and when did they purchase it?
- If you plan to move there, find out from police reports, weather reports, and from neighbors whether there are any incidents you need to know about.
- Why is the owner selling?
This list is just a brief summary to give you an idea of what to ask about, and your agent will advise you on other areas worth looking into. As a homebuyer, you may be tempted to secure variable loans but these can be a big problem when interest rates spike. So to avoid getting into trouble, buyers should make certain that they have a lot of financial flexibility, so that they can handle making the payments if rates go up. Alternatively, they should have a plan to convert into a traditional fixed-rate mortgage at some point.
Don’t be in a hurry to sell property
Many people assume that it’s only first-timer buyers that are likely to make mistakes in real estate. But the truth is that even sellers can make mistakes, especially when they overlook basic advice like waiting for the right time to sell property, or failing to invest on maintenance and upgrades – which can increase the value of your house by tens of thousands of dollars. Learn as much as you can from people who’ve sold property in your area, and discuss some of the challenges they faced, and how they dealt with them.
Don’t do everything by yourself – build a team
If you plan to do a lot of real estate investing, then it’s good that you learn from the start that this is a team sport. You cannot underestimate the importance of having professionals working together, as this will eliminate most of the anxiety that comes with handling complicated business matters like home buying and selling. Having a good agent will mean that you will be able to locate a fantastic piece of property at a fair price.
By working with a good mortgage broker, you will have access to the best loan financing, and if you hire a real estate investment coach, they will help expand your investment, making it possible to attain great success. A complete team will include an attorney, property manager, tax accountant, real estate photographer, interior decorator, contractor, stager, architect, and more.
You probably won’t always get things right in the real estate business, but what’s important is that you learn things quickly. There is a ton of information that must be analyzed: demographics, market data, trends, property data, rental projections, cash flow, neighborhood data, etc. This information will help you predict correctly when making decisions. It is also wise to have people that can help you decipher some of that information so that you can make better plans for the future.