Real estate investment is a conscious choice and involves careful thinking. Lack of time spent on real estate decisions may lead to inappropriate decision making. While its human to err, it is essential to learn from our mistakes and vouch never to commit them again. In light of effective decision making, here are some points where an investor must exercise utmost caution while dealing in real estate:
Timing The Deal
Real estate is not the place for impulse buying. We are often attracted by false claims or freebies offered by builders. Timing is the key in real estate. The demand and supply situation in a location or area has a huge impact on the property prices. The investor must always be on the lookout to maximize his investment by grabbing the best deals.
Due Diligence
Property purchase must always be the result of abundant research. Right from the location to prices and amenities, everything must be carefully checked and thought of. What is also important here is the legal status of the building. Investors often fail to check if the building they are investing in is under litigation or is built in an area which does not fall under legal limits. Along with the due diligence of the property, the reputation of the builder must not be undermined.
Documentation & Paperwork
Real estate business demands extensive paperwork and the same cannot be overlooked. Investors often get swayed by the claims made by the builder and ignore the paperwork or give acceptance without proper scrutiny at their end. There are a lot of details mentioned in the fine print which people tend to miss. This can result into massive miscommunication, expectation mismatch and even loss of money. Thus, it is the duty of the investor to exercise caution while doing the paperwork.
Blind Trust
We often tend to rely on others while making real estate decisions. This could be for the purpose of seeking mental support, financial support or legal support. While reliance on others is not a thing to be discouraged, blind faith in someone could prove to be a deterrent in your own decision. Trust on others must always be backed by our own research to ensure we get what we want.
Setting Expectations
It is natural for us to attach certain expectations to any form of investment that we do. However, it is necessary to set expectations that are reasonable. Setting unreasonable expectation leads to disappointment and might even interfere in our financial goals. Investors must have realistic expectations from real estate.
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