Real Estate Traps To Avoid

Don’t get attached. Okay, that was a bit too blunt! Basically, your real estate investment (be it land or a house/apartment) is beneficial to you both emotionally and financially, but it is currently only worth a specific financial amount to everyone else. Landlords, real estate agents, and potential buyers all assess the property based on the numbers, and when you start to become emotionally attached to a property or the possibilities of that piece of land you may miss some very obvious problems it might have.

They say you’ll know the right place when you see it and that is true, but don’t go overboard.

Don’t take anything at face value. You might feel compelled by the beautiful house that stands out so vividly from the rest of the neighborhood, but keep in mind that home values are influenced by the average market price of the homes in their area as well. The extraordinary house might not be worth so much if the houses around it continue to be average.

In the same way consider that a home’s sale price doesn’t reflect the amount you’ll pay on property taxes, in interest, and other variables that will affect your monthly payments. With the property you purchase you are also taking on years of interest payments, mortgage payments, and insurance costs that inflate the original price of the property much more than its face value.

Make a down payment. It may seem overwhelming to come up with such a large sum of money, but consider this: most first time home buyers leave money on the table by obtaining 100% financing right off the bat and end up paying even more in interest than they would if they saved a little more for an upfront down payment.

Don’t trust anyone. Again, I may come across as a bit too blunt but you can really never be too careful with the large amount of money you’ll be putting down to purchase your piece of real estate. From the owner of the property to your real estate agent (assuming you are using one) you want to make sure that you are double checking what the people around you are telling you about the property, what you need to do, how much you should be paying, all before you sign on the dotted line.