There is a common mantra among real estate professionals and investors which is simply the word
Location! Location!! Location!!!
The thinking behind this is that, when it comes to making money in the world of real estate, the most important thing is where the property is located.
The second most important thing is, also, where the property is located. This is also the third most important thing. Essentially, location is important when it comes to making a success of real estate investments.
Of course, most people already know that, so why does the business make such a big fuss about location? It’s like making a big issue out of breathing, isn’t it?
Well, not quite, because many people do not realize just how important location is, how fine the margins are and how big the difference can be between two houses which are in plain sight of one another.
It’s not just about what town the house is in, it’s about what street, the exact position within that street, and what you can see from there.
It may be tempting when listening to a friend talking about the great deal they got on a house in a certain area, to think “well, I know for a fact that there is another one up for sale there – I can buy it for that price and raise a significant profit”.
This may not actually be the case, however. The position of a solitary tree, church tower or bend in the road can have a pronounced effect on what you can expect to pay and what you can expect to receive for any real estate – so do your homework.
Follow @jimmicklimited and @Lionrealtorsng for more.
When someone tells you that there is good money in real estate, they are not going to be telling you anything new.
We all know that there is profit to be made there, and no-one will get any medals for breaking the stunning news that it can be a lot of money.
What we need to be careful with is when someone describes something as a “can’t miss” prospect.
There is no such thing in real estate, and claiming that there is will show someone to be a fantasist.
When you buy real estate for the purpose of renovating it and selling it on, it is important to be as dispassionate and profit-focused as you can possibly be.
One part of this is to do the entire math involved in buying and selling, and make sure that the deal has the largest potential upside you can possibly manage.
This means getting the lowest price possible when buying the house, spending only what is necessary to make the house attractive to potential buyers, and doing the work so well that you push the selling price as high as you can.
Think of it this way. Your buying price added to your budget for any work done to the house (this includes materials, labour and any arrangement fees you may need to pay) must be lower than the price you get when you sell the house.
Anything other will simply lead to you making a loss or merely breaking even – and if you have been working on the house when you could have been earning a wage, this will be a net loss.
You don’t just need to be confident that you can turn a profit on the deal; you need to seal off any potential avenues which could lead to you not turning one.
Even after all of this is done, you are still left with the question of how you can make the profit as high as possible without spending too much money.
Avoiding vanity projects is important here – if you are thinking of tiling the bathroom all in gold, stop right there because it will never make you more money than it costs you.
Follow @jimmicklimited and @Lionrealtorsng for more.
Most of us have heard someone – often our parents, but probably more often a character in a TV show – describing another individual as being “from the wrong side of the tracks”.
It is one we hear, and repeat, without necessarily giving any thought to what it means. We as humans have a tendency to do that – but what does it mean?
Well, to make a long story short, it was realized some time ago that people who could afford to choose where they lived would pay for a house in a location that was peaceful, clean and sedate.
Too much through traffic means a lot of pollution, and can also cause structural faults, and also an increased number of strangers – something we were always taught to dread.
Poorer neighbourhoods, with higher crime rates are naturally a “less desirable” kind of person living there, as a result, were often positioned close to public transport links such as railways and (in larger cities) airports.
Anyone living in that area would be considered bad news by the richer families who intended to maintain a spotless reputation – and if the son or daughter of a rich was seen to be consorting with someone from those areas, that could mean social suicide.
This kind of reputation still persists for many people. However, there are also advantages to living and buying in what might be considered a poorer, grottier neighbourhood. Prices are lower, but sound investment does mean that you can still make a decent profit. After all, proximity to public transport links also has its benefits.
Follow @jimmicklimited for more
You have probably heard it before; investing in real-estate is among the best investments you could make. Usually, the value of real estate properties increases. It may sound easy, but beginners would usually find out that it is not that easy. It would require knowledge which could be achieved through research, planning and hard work. There are common mistakes in real-estate investing which could lead to serious pitfalls.
Before you proceed in investing your hard-earned money in real-estate, you would have to consider several things first. For example, you would have to identify what kind of money you want to earn, it could be lump sum where you could have to venture into wholesaling and flipping. Flipping means you would have to buy properties and hold them until you could sell the properties for profits.
Before you buy any kind of investment, you would have to be familiar with the laws covering the property. Different states would usually have different laws covering property acquisition. There are legal procedures that you would have to undergo or complete to fully claim your right to the property.
Your investment could also provide passive income which would require you to look into houses or properties that could house a number of families. These houses could be rented out. However, this kind of investment may have drawbacks since the property may end up with bad tenant or without any tenant at all. If directly managing the homes or rental units is not your cup of tea, then you could try getting a real estate investment group. They would be building or managing the property for you in exchange of a percentage of tenants’ monthly payments.
If it is your first time to venture in real-estate investing, then you would have to be aware of common beginner’s mistakes. One common mistake is speculation. Beginners would usually follow the media, buy a property and wait for its value to increase. This could be risky. As mentioned earlier, real-estate investing requires research. Aside from that, you would also have to be prepared for the worst. If nobody buys the property, then you would have to think of other methods on how you could generate income from it. You could lease it, rent it and think about other exit strategies.
Another common mistake is getting emotions involved in their first investment. Emotions may cause problems when making business decisions like prospect buyers being cut-off even though they are offering the best deal. Before you start looking for properties, make sure that the real estate team is ready.
Most people think that they could start investing on their own, big mistake. A good real-estate team and mentor would surely help you move quickly towards your goal. Who do you need in your team? You would need a real-estate agent, loan officer, tax adviser, and even a lawyer.
When property hunting, keep two things in mind: location and value. There are newly-developing places where real estate investing could provide you with greater financial returns in the future. Usually, you would find a great property in a great location, it may need some fixes but it could be addressed inexpensively. You may also want to think twice about buying a good property or residential house when it is located in areas with high foreclosures rates. Also, think about buying a property close to your home. This way you could focus and check on the property without being hassled of travelling for hours.
Real estate investing would not make you a rich man overnight. It would require you hard work and good marketing strategies. You would have to be mentally, emotionally and psychologically prepared for it. But when strummed in the right strings, it could definitely provide you financial stability.
Follow @jimmicklimited for more.
Real-estate is among the industries who are stepping up with their online marketing. According to the National Association of Realtors about 84% of home buyers and sellers maximize the internet as a marketing strategy. Those who are relying on realty magazines, books and television for selling and hunting homes are decreasing in numbers. Given with this kind of information, realtors cannot disregard the fact that online marketing has become a major force in the industry.
Along with understanding the benefits of marketing online, we should also take a look at the risks posed by online scams and fraudulent activities. According to studies, about N200 billion are lost by Nigerian organizations every year because of online scams and fraud. Home buyers and even home sellers are not exempted from these fraudulent activities.
An example of such is when home buyers would see prospect homes listed in both web-classified ads and official real-estate agency websites. The prices have huge discrepancy and those listed in web-classified ads tend to cost less. Attracting more clients, home buyers would later find out that it is not an official sell at all. They lose money and at the same time, possible property acquisition.
How to Avoid or Identify Scams
How do we avoid or identify such scams? Usually, those who are claiming to be the owners of a property up for sale or rent would say that they are out of the country. If you are renting a home, they would ask for an advanced payment which could be deposited or sent through check. Never pay or provide money for any property that you have not yet seen. Some real-estate scammers would be able to show you a property, however, remain cautious and do some research first on the property before proceeding with any kind of payment. Usually, a search on Google using the phone number will lead you to suspicious information.
A seller could also experience fraud. An interested “buyer” would send an email and ask about the seller’s property. They would usually ask details about the home. As a seller, you should check other web-classified ads. It is not unusual for seller to find their own property listed there by another person.
Stealing a person’s identity is another major online problem. If you are registered in a firm, there is a possibility that other people/lenders would be able to pull up your information. There are also some “agencies and firms” that would solicit membership. Before joining, verify if the firm or agency is legitimate. They may only be using your personal information for their own transactions.
To protect yourself against real-estate scams, never provide any kind of personal and financial information to individuals or organizations that would send you emails asking for it. Verify the information provided by the person you are dealing with. Scammers would usually send checks to give an impression that they are indeed making payments. You could ask the bank and have the check verified.
But the best thing that could help you avoid such problems is by getting a real-estate agent or a mentor to help you out. Mistakes in real-estate happen because beginners or even those who are already in the business for a while would forget to talk to others and ask for advice.
Follow @jimmicklimited for more.
Buying a home is scary. If you get it wrong, there is no “let’s-return-it-for-a-refund” policy available. You don’t have 30 days to “think about it” and see if it works for your family. IF ONLY!!
So I wanted to write a follow-up with even more questions you must ask before you buy a home!
1. IS THERE ELECTRICITY IN THE NEIGHBORHOOD?
The last thing you want is to buy a house where there is a total blackout. Electricity is a basic amenity and though it still is not a stable source in the country, you should at least have access to what is currently obtained. You should check on the neighborhood at different intervals to know the true state of the electricity condition and not rely on the word of the owner of the house or agents.
2. WHAT’S THE SLOPE AND LENGTH OF THE DRIVEWAY?
What about the slope of the driveway? If you have young kids, will they roll right into the street, or will their toys roll down the driveway into the street? While my kid love riding her scooters down the driveway and she (now) know not to go into the street, I’ve chased many of balls into the street. I’m always afraid of that slope, though.
3. HOW DO THE SCHOOLS RANK NEARBY?
Even if you don’t have small kids, how the schools rank means a lot. Because eventually you’ll sell your house, and the next buyers may have kids. If the schools suck, run. The quality of schools affects home’s value. When we were looking for our home, I made sure to check school rankings on online and that I was buying in a good neighbourhood based on elementary schools. My child was starting Kindergarten soon. But even with no kids, you should buy in as good of a school district as possible.
4. ARE THE GUTTERS IN GOOD CONDITION?
Don’t just fantasize about pretty lawns and patios. Check out the gutters! Gutters are expensive home repairs! If it’s raining, is water pouring over the gutters (which could mean too much water next to the foundation, which could mean water in the basement)? Are there gutter guards in place? Do they work well? Easily backed up gutters means water poring over the gutters–again, too much water next to the foundation. Are the downspouts in good condition? Where do the downspouts empty out the water? Is the water emptying next to the house or away from the house?
5. WHO IS DOING YOUR HOME INSPECTION?
To avoid any conflict of interest, I think that buyers should shop around for their own home inspector. Most agents will recommend a list of inspectors. That’s fine. But make sure you select your own. You want someone who will be completely impartial when doing the home inspection.
6. HOW MUCH NOISE IS IN THE NEIGHBORHOOD?
The noise you hear during the day when people are at work may be different from the noise at night. Be sure to ride by the house during the day and night so you’ll know. Same for weekdays and weekends. Is there a hospital nearby? Will ambulance drive by at 2 a.m., blaring their sirens? Is there an airport nearby and loud jets will be landing at 10 p.m., right when you’ve settled into bed? What about trains nearby? Do they blow their horns? Is there a guy that lives next door and runs his power tools at all times of the day and night? You need to know this.
7. HAVE THERE BEEN ANY NEW RENOVATIONS LATELY?
One reader said it best: no one renovates their house to sell unless they’re trying to hide something. Well, not every renovation has to be so sneaky, but you never know. Is there fresh paint in the basement, covering up water stains? Is there anything else that they’ve replaced just to sell? What’s the real story behind their renovations? Don’t just “ooh” and “ahh” over the new whatever. Ask about the renovation and why they decided to renovate now.
8. WHAT WOULD YOUR COMMUTE TO WORK BE LIKE?
Imagine finding the perfect house and telling yourself, “Well, it’s only 20 miles from work!!” But little did you know that 20 miles takes 1.5 hours on a good day? Is that acceptable for you? If you’ve found a house you really like, wake up extra early and see if you can run that morning commute around the same time you would be if you were to buy the house. What about the evening commute? Instead of going home, drive to your “new” prospective house. If you can’t stomach the commute, it’s not the house for you, no matter how “perfect” it seems.
9. HOW OLD ARE THE APPLIANCES?
This is something that a home inspector will tell you during an inspection, but here’s my advice: look for this info while you’re at the open house! Think of it this way: if you know that you’re going to have to sink over N300, 000 in new appliances or repairs, you may be able to adjust your offer price accordingly, or decide not to even put an offer on a house. Don’t wait until you’ve gotten so far into the process only to find out at the home inspection, “Oh. Yeah. Your appliances are old as crap and will need to be replaced as soon as you move in.” Know this info up front so that you can either walk away or be able to use that info to come up with a reasonable offer.
Follow us for more, @Jimmicklimited