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Investing In Real Estate In An Unfamiliar Territory

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Real estate can be very lucrative in targeted areas of some countries. Some areas are very high in demand due to the availabilities of infrastructures, closeness to offices or industries, central location, free from hoodlums and slums, identifies with a certain kind of demographics, closeness to commercial hub, free from flooding or other natural disasters, etc. 

 If you must invest in such territories due to high rates of returns, ease of resale, etc, it will be in your best interest to investigate the terrain properly. For the same reasons discussed above, a lot of people will be interested in acquiring properties in the same area. So do not rule out the possibility of all kinds of fraud.

 It is always good to visit the location of the property by yourself and do proper due diligence before paying. It is important to know the age of the house and the reason why the owner wants to sell it. This is because the owner may be selling the house because of the age or frequent maintenance issues associated with the house. Also, the owner may be selling the house because of some latent issues unknown to you.

 If you are not conversant with the area, make sure to move around to ascertain the developments, future government or community plans, business or geographic forecasts, type of residence, and topography of the area. If you are buying a property forspeculation purposes, keep in mind that some areas are already at their peak thus the price of the property may have little or no increment in the nearest future. So the immediate benefit from such property may be its rental value. What this means is that the total return on investment may just be a few years better compared to other areas. Ensure to compare the rental returns with the purchase price less maintenance expenditure.

 Never use emotion to buy a property because the house is beautiful or you like the architectural design, and/or you like the demographics, etc. Always make sure the property checks out on almost all your needs or desire if not all. Always compare your return on investment for a house in one area to another house in another area. Sometimes it might be better to buy two houses in a cheaper area instead of one expensive house and vice versa. In such cases, other variables may be the determining factor. For example, resale value in the nearest future, property demand versus supply, etc. To cash out on properties in some locations is very difficult due to low demand or excessive supply.

 Government policies are another thing to consider. Talk to a professional real estate agent or lawyer that operates in the area. They will be in a better position to educate you on the government policies regarding owning properties in the area. Don’t rely only on your understanding of what you read as it may be subjected to misinterpretation. Some properties are in a government acquisition area or in a proposed government scheme. If so, any privately-owned properties in the area may be demolished in the nearest future.

 The ease of perfecting your house/property document with the government is another thing to take into consideration. If you are purchasing a house as an expatriate, make sure you understand the government policies and your limitations. For example, some governments issue a 99-year certificate of ownership for real estate. The certificate usually cost a significant amount of money to renew. It is not unusual to see some real estate with an 80-year old certificate of ownership in highly sought-after business districts or high net worth residential areas. A new acquisition of such a property means the buyer will have to pay a huge cost for the renewal of the certificate. A buyer needs to check and understand hidden costs or limitations like this.

 Don’t feel pressured to buy a house. Remember that any decision you take might be stuck with you for a long time. The agents, lawyers and other people involved are all working for you; as such you are not under any obligation to be compelled into buying a property or house when you are not 100% convinced.


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