The Most Overlooked Things To Keep an Eye on When Buying Property
It doesn’t take a genius to know that property is often a wise investment. Typically, the value of property doesn’t depreciate over time (in fact, most types of property increase in value). Property can be improved upon to add even more value to it. But with all that being said, I have seen people make big mistakes when investing in property. I’ve even made a few myself.
Some people buy a property, then sit on it and wait until its value increases before selling. Others buy property with the intent to build their dream home on it. Whatever your purpose for purchasing a piece of real estate, here are some of the most overlooked things to keep an eye on before you sign any official purchasing documents.
Not Checking the Classification
Every property has a classification that is referred to as its zone. Some common zones include residential, agricultural, industrial and mixed-use. When you’re buying a property, make sure you check with the city’s local planning and zoning department to determine how the property is zoned. It would be a shame to purchase an idyllic piece of land to build a house on, then find out it’s zoned for industrial or commercial use!
Even if a property is located relatively close to a residential neighborhood, that does not necessarily mean it’s zoned as a residential property. It’s always better to be safe than sorry, so just do the legwork to investigate how the property is classified before buying.
Failing to Inspect the Property in Person
Have you ever seen a gorgeous piece of property online for a steal of a deal and wanted to buy it without seeing it in person? Many people invest in real estate in this way. Unfortunately, pictures of a property can often be extremely misleading. If the seller doesn’t have any scruples, he or she might intentionally avoid taking pictures of certain undesirable areas of the property. Some sellers have even taken pictures of adjoining properties and posted them online to trick buyers into purchasing their property.
For these reasons and more, it’s essential to check out a property in person before you buy. You may also want to check for signs of a potential problem, such as flooded areas, proximity to undesirable sites (such as oil drilling sites or dumpsites), and the topography of the property. If you see anything of concern, you need to give yourself time to think about whether the low price is worth dealing with a property that may not be the wisest investment.
Paying the Wrong Price
If you spend any time looking at real estate prices, you’ve undoubtedly noticed how quickly they can fluctuate. If you’re not paying attention, you could end up paying much more than a property is worth. When you have your sights set on a certain property, you’re more likely to make a shotgun decision and pay whatever the buyer is asking, even if it seems too high. But if you’re not careful, you could end up paying more for a property than you could turn around and sell it for, and that’s never a wise financial decision to make.
If you aren’t sure how much a property is worth, take a breather and give yourself a minute to check the prices of similar properties in the area. You may also want to consult with a trusted realtor to make sure you’re getting a good deal. If you determine that the owner is asking too much, all is not lost. Simply submit an offer that’s more in-line with current real estate values. The property owner may have the property listed high because he or she assumes price negotiations will come into play.
If you’re getting ready to purchase property, I encourage you to become familiar with buyers' common mistakes. That way, you can avoid making the same mistakes yourself.