In part 1 of the article went over how a strange price tag, history of residents quickly moving out and reselling the property, lack of information on an online listing as well as the person working with you listing the property he is coercing you to invest in are all major red flags in the real estate industry for an investor.
In part two we will continue and educate you on some more warning signs regarding the real estate investment so that you can invest your money towards a safer and more profitable investment:
Property is near a busy road:
Properties that are near busy roads or commercial sectors might be quite ideal for some home buyers. This can mean that these people have closer proximity to their jobs or are near commercial services. However if you are going to get a house to imagine serene and peaceful living; such a property might not be for you at all.
A lot of home sellers will get tricky and will try to hide this fact from you. They will use specific angles on the listing photos to lure people towards visiting and buying this property. Once again this can be detrimental to your time and resources you could have spent to visit a property that you are actually going to be interested in. home sellers can prove to be dishonest as they will try to highlight the best aspects of property and cover up the flaws in listing.
You can simply avoid this red flag while property hunting by going to Google maps and checking the surroundings of where this specific property is located. This can not only help determine how peaceful of a life you will be living in this property; but also can help you see the proximity of useful amenities in the surroundings.
Constant home renovations:
Although there isn’t anything inherently wrong with older properties; and some house hunters might prefer these over newer architecture and constructions, having a house that has been renovated again and again could be a cause of concern. Houses that get renovated and have constant add on in the name of improvements usually are going to indicate that the original or actual property is not up to par with its values. Add on can often be ill fitting to the aesthetic or functionality of a house and can stick out like a sore thumb.
There can also be an issue on the rules and regulations regarding the property renovations. Adding in an extra room or building upon another story might add to the perceptive value of a house however this doesn’t mean that these are confirmed to be regulated and approved renovations. If such a property is attractive for you; then you can check on the regulations and laws of this particular region where the property is built to check if the regulations are done under legal boundaries. Last thing you want as a new house owner is to get in trouble with the law for actions previous home owners have taken.
The street or society has large number of houses for sales:
What does a large number of listings for the same housing society mean? This shows that people are convinced to more out of this place for a better residence elsewhere. It would imply that their quality of life was being compromised while living in this area that is why people are moving out at once. Some recent event like a robbery, theft, and unavailability of amenities or other security concerns can be the most prominent reasons.
Real estate is a market whose trends can variety greatly over the course of few months. It is important to keep in mind that the property you are going to buy is also having a good resale value down a few years. Resale value means that you are also going to be at a profit when you sell this property in he future.
A home seller’s first priority is always to highlight the most positive aspects of a property to get it to sell as soon as possible. If there is a mass exodus from this society or area; it is rare for a home seller to disclose the reason for people moving out of a society; the home seller is not going to tell on this.
This is why researching the market and referring to a knowledgeable real estate is often recommended for property buyers. This can help you find out possible reason to why a specific street or a society is now undesirable for residence. Moreover real estate agents can help you find out any reasons to why this property might not be the one for you.
A strange smell on the property:
If you are convinced enough to reach out and go on the property for inspection; noticing a strange foul smell is quite concerning. Smell is one of those aspects that are obviously not detectable on home listings. To get the property to sell faster; dishonest home owners will try to clean up for the pictures, that is why a noticeable smell is going to be quite alarming.
Think of a rat or mice problem, infestations, mold problems or water damage. All of these can be quite horrific for you. You might have to pay a large sum of your money to get these problems sorted away from your house. This is the last thing a home owner would want to have an infestation or health concerns staring their way straight after moving in. So make sure that there isn’t any strange smell when you are conducting the property visit.
House is a flipping property:
Although flipping houses is a completely ethical and smart practice for people on the real estate market and it can be done honestly to benefit of both the buyer and the seller; it can be a red flag for the buyer.
The practice of property flipping involves the property investor buying an old or worn out property and then make significant improvements on the property to make it shine on the market. Since the original cost of property alongside investment spent on improvements is much lower than the property appreciation, a significant profit can be achieved. House flipping can allow for an opportunity for the community to have an old and worn down house that sticks out on a beautiful and posh block to liven up again and add value to the overall neighborhood.
The problem with flipping property occurs when the investor is trying to pull trickery and fraud in the name of cheap improvements. Dishonest property flippers or straight up scammers will do something termed as ‘quick fixes’ on the property. By cutting corners these dishonest property dealers will save themselves a small sum of money and trick the buyers into thinking that the renovations are very solid.
Make sure to hire a property inspector while visiting the property to steer clear of any trickery and cut corners involved in the so called renovated property. House staging is another great marketing aspect of real estate market however once again some dishonest investors would love to use home staging to cover up the flaws. Once again the trained eye of a property inspector can help alert you regarding the quality of home repairs and renovations.
A final piece of advice:
Try to follow through with your real estate investments in a systematic and organized manner and leae no leaf unturned when it comes to confirming the surety of a property deal. To avoid any trickery or scams and point out any undesirable red flags to yourself…. Make sure you are:
- Conducting proper research on the property’s history, its surroundings, the market rates for property in this area and the surrounding location and amenities.
- Look for listings on approved online listing websites to avoid any fake listing scams. Try to gather information on the property advertiser’s past with property dealing to see how satisfied people have been in their past deals.
- Hire a lawyer, a real estate professional a property inspector or others in case you yourself are not sure about the investment’s safety. The knowledge and experience of these individuals can go a long way in determining your success with the investment.
- Check for errors and discrepancies in the property papers before signing; take help of the aforementioned professionals if need be.
- Never ever skip the property visit portion of home investment as it can reveal a lot of new things that the property seller has not disclosed to you yet.
And with this we will conclude our 2 part article on the red flags to look out for in real estate industry. We really hope that this article was very informative for you!