4 Things To Know Before Closing Your First Real Estate Deal
You’re about to make the final jump. You’re about to make a big financial commitment. You ought to feel anxious – and scared even. And that’s only normal for the first-time real estate investors.
But before you make the final call, it’s essential that you have thought things through and are completely assured of it.
In that context, here are four things to know before closing your first real estate deal:
1. Is It A Good Property
This is quite a no-brainer. But it’s surprising that so many investors spend so less time in ensuring that the property is *really* good. They focus too much on a couple of factors, ignoring the rest.
“Good property” is much more than just its price, size and location. FROM the macro-micro economic condition TO the market forecast, credibility of the seller TO in-house amenities – there’s a lot to consider to really ensure that you’re going for a good property.
Have you considered all the possible factors?
2. You Have Sufficient Capital Backing
Here’s what many first-time real estate investors do…
They overextend themselves financially. They agree for funds at a high-interest rate. Without research, they settle for EMI of the home loan that they can’t necessarily afford. They sell their own assets. They dry-up their emergency fund.
And they do all these with the anticipation of good returns from the property.
Sometimes such bets can pay off well. But often, the move is too risky to take.
If you don’t have enough capital backing (which you would also need in property renovation), if you have to squeeze out all your financial juice, real estate investments might not exactly be a good option for you at present.
3. The Property Is Sellable
Of course, you don’t want to sell the property. You want to hold it as long as possible. After all, becoming a profitable real estate investor is all about playing the long-term game.
What if things go south? What if the market is about to crash and holding this property can really hurt your portfolio? What if you need money urgently?
For such emergencies and undesired situation, it’s important to stay prepared from the go.
This is why when you purchase a property, you must also factor if you can sell this property (at the right price) quickly, whenever needed.
Now the saleability of a property has its own determinants, which is another topic of discussion altogether. We’ll discuss that later.
4. You Have The Right People By Yourself
This is not a DIY thing; more so if you’re a beginner and have limited market knowledge. Having top real estate companies in Los Angeles by your side is important.
The professionals and real estate experts can help you make the right call. They can help you find better opportunities and properties. Moreover, after purchase, every property requires proper management for maximum cashflow. The top real estate companies in Beverly Hills, USA, will also have you covered here, taking care of your property, finding the right tenants and ensuring optimum returns.
If you have no professional assistance already, you might want to have it before you make the final call.
These are four things you should know before you close your first real estate deal.
Now that being said, it’s equally important to not fall victim to analysis-paralysis. You don’t want to think too much and plan too much. Be smart and take action.