Top Mistakes to Avoid When Invest in Property

"Offer too little, and you lose the deal. Offer too much and there is no profit."

Whether buying to renovate the house and resell; to keep it as a rental; or to sell it wholesale to another investor, these mistakes are often made by both novice and even more seasoned investors.

If I'm completely honest with you - I catch myself still starting to make some of these crucial errors. Make sure you are informed and armed against these deal killing mistakes.

Top Mistakes

Not dealing with a motivated seller - If the seller is not motivated - even desperate to sell - then you will never be able to negotiate a price that works and you are just wasting time and frustrating yourself for no reason. In case if your are looking for flats in Jaipur, choose your reseller or builder wisely.

Too much emphasis on seller's desired price - Investors often start with the Seller's desired price as a benchmark and attempt to work the seller down from there. What the Seller wants for the property is irrelevant to what can be paid. Use a formula you trust and determine your price first. Begin your negotiations with a number below your top price and negotiate up from there. If the seller is not remotely interested, then they are not motivated.

Using comps that aren't really comps - Although appraisers can use houses that are as much as a mile away and sales that up to a year old, it is better to use comps that are less than six months old and less than a quarter mile away (even up to ½ mile). Make sure the comps truly are similar houses, in similar areas. Lately, many wholesalers are using comps from neighboring areas that are within the desired distance, but completely different type areas. The house and the neighborhood must be similar to be an accurate comp.

Not determining your highest price before starting negotiations - Before you even start to negotiate with the seller you need to determine your maximum profitable offer (MPO). This is your drop dead point - the deal breaker price over which you will not pay. You must know what that number is.

There are some mistakes to avoid while investing in property.

Looking for a Home? Keep the Points in Mind!

Easy finance availability and economic growth are the major reasons, why young Indians want to invest in real-estate. Back in the year 2013, to promote P. Chidambaram (Former Finance minister of India) raised tax deduction limit to Rs.1 lakh for housing. Today also, the Government of India regularly announces the several housing schemes to provide shelters to the common people. Apart from Gov. of India, there are several private banks who are offering home loans. Apart from banks there are also several private financial institutions who offer home loans. Buying a new home or flat is a dream of everyone. There are several things to look while buying a flat.

Have an eye on interest rate: Different banks offers different rate of interests. It is very hard choosing between floating and fixed rate of interest. During fixed rate of interest, the rate remains same for throughout the loan tenure while for floating loan type, it fluctuates. One should select the most appropriate option according to the income and profit.

CIBIL score: CIBIL score matters a lot while applying for a loan. The bank offers you the loan amount based on your score. Better it is the high chance of getting the good amount. Good score also makes the loan availability at the cheaper rate.

Research location: Buying or designing a home needs a huge capital. Therefore, before applying for a loan, it is very important for you to research the locality. Check out for basic availability like water, road, electricity etc.

These are some points that you need to take care before investing in home. Share your thoughts in the comment section.