There are a few things that every property investor needs to know before they buy any property. The right information can make you money. When it comes to various aspects of property negotiation, the more informed person is always at an advantage. Seeking for and having the right information is the core of the due diligence process. Your decision to buy or not to buy a property should be based on the availability of the right information. What you don’t know, you can research or contact those who are likely to know. This is an important step that should never be neglected by any serious investor.
The first information any real estate investor needs is property information. You need information on what is available in the market for sale. Prior to the Internet age, the property search process was manual and cumbersome. You often needed to reach out to several real estate agents scattered all over town and yet you were likely to still miss out on several deals listed with any of the agents. Things are a lot better now. There are several property websites listing thousands of properties for sale. Using the latest search technology, you could narrow down your search to specifics and get results in real time. There is still a significant number of bank-related properties for sale often under the radar.
After narrowing down on the properties of interest, you need adequate information on the title. There are several properties on offer that do not have verifiable property documentation or title. These properties are often secured either by possession or chance. Many properties fall into this category. Ideally, you need a property that has registered documents such as a Certificate of Occupancy that can be verified through a search at the Lands Bureau.
In addition, you need information on the condition of the property. Many property investors do not involve certain professionals when evaluating properties for purchase. Astute property investors have a team around them consisting of engineers, surveyors, and others. Except you are absolutely sure that you know what to look for, you may need an independent professional to help you check the structural integrity of any building before you buy. You are likely to have heard that things are not often as they appear. There are nice looking buildings that are a structural mine field that only an expert could identify.
Another critical information can serve you well is information about the property owner. This is often useful for negotiation purposes. Sometimes, understanding the reason why a seller wants to sell a property can help you to package your offer in a way that will make it irresistible or at least make it a win-win. Some information can also give you a red flag. It is also possible that this can lead you to a discovery of some information that will help you not to get into the wrong deal with the wrong person.
While information about the owner is relevant, information about government policies and programmes that can positively or negatively impact on the value of the property is even more important. I recollect the story of a property investor who discountenanced several government announcements regarding the area where her property was situated. Unfortunately, even though the government was slow in implementing the project, they eventually did resulting in half of her property being lost to road expansion.
Government policies sometimes lay fallow for years and several people ignore them. However, it is instructive to note that the government can wake up anytime and implement these policies. If you are caught on the wrong side of the law, this move can cost you your investment.
Money, it is said, answers all things. If there is a part of the property jigsaw puzzle that you need to get enough information on before you proceed with a property purchase, it is the financials. You need to get your financial house in order before you proceed on your property search. Some investors predicate their purchase on the sale of one of their assets or on a promised loan from the bank. This is a model that often leaves many people frustrated.
The reason being that property is generally not a liquid asset. Unless you have sold the property and already have your money in the bank if you wait until you have a property to buy before putting it up for sale you will end up missing many good deals. A similar situation applies to bank loans. If you wait until you are ready to pay for a property before contacting the bank you might be in for a surprise. It is better to get the property acquisition cost right and make adequate preparation for how you will pay.