Buying a property is a big deal, whether you’re buying your next home or looking for a building to use as an investment. You’ll be investing a lot of time and money in the process, so it’s helpful to know what to look for when browsing the available deals. You don’t need real estate sales training to make an informed decision. Ask yourself these five questions before signing the dotted line.
Can you afford real estate?
The first question most people ask before buying a property is whether they can pay the mortgage. However, the actual cost of a property involves more than just the mortgage. You must pay property taxes and insurance premiums annually. If there is a homeowners association nearby, you must also pay these fees.
You have to consider the extra cost. Air conditioning and heating costs are higher in larger buildings, so make sure you have cash to cover these costs. If electricity, water or internet are included in the rental of your home, you should be aware of the separate costs of these services. The issue of commercial real estate financing can also arise when looking for an office building or warehouse. Lenders may have different requirements for these loans than they require for residential real estate.
Planning: How to use the property
Once you know what you want to do with the property, you can decide which one is best for you. If you’re looking for a vacation home in a tropical climate, don’t look for real estate in Wilmington, NC. You better look at Belize real estate. If you need space for a corporate office, start looking for commercial real estate leads.
Consider how long you want to keep the property. During times of low interest rates, you may want to get a nursing home but haven’t moved in yet. Consider renting it out for a few years to pay off the mortgage. On the other hand, you might want to join the ranks of real estate speculators and hold the property long enough to make a profit.
Is real estate a good investment?
There is no real estate guarantee, but you can look for trends that indicate whether the property value will rise or fall. Find out if retail prices in the area are going up or down. Ideally, the property will appreciate in value, allowing you to accumulate assets and then sell them for more than you paid.
Ask about planned developments and amenities, such as mall construction or street widening. Shopping malls bring more convenience and jobs, but also increase noise and traffic. You could also lose part of your yard if the municipality plans to widen the road in front of the property. The local government may also decide to lay a dirt or gravel road. Both of these conditions can affect the value of the property.
Do you have a way to maintain the property?
As a property owner, you’re responsible for taking care of it. Maintenance expenses can add up, especially if you have to replace a roof or complete structural repairs. If you have the skills and equipment, you can save money by completing repairs on your own. However, if you own real estate in Costa Rica or on the other side of the country, this may not be possible. You need someone local to handle repairs for you.
Do you have to deal with legal restrictions?
If you are considering buying property in another country, make sure you understand the foreign property laws of that country. You may need citizenship or a residence visa before owning the property. Before entering into a contract, consult a lawyer who specializes in the laws of that country. A lawyer can explain the buying process to you and guide you through the buying process.
You may also be restricted by U.S. law. Local governments have land use and zoning laws that govern what you can and cannot do on your property. For example, if the property is in a residential area, you may not be able to do business there. Community organizations such as homeowners associations may also have regulations governing land use.