What aspects should be top of mind when planning to invest in real estate? How do you ensure you make a smart move? First, consider working with a knowledgeable local realtor such as Behrooz Davani – a vastly experienced Montreal-based professional with your interests in mind. While at it, consider the critical factors below:
Location
Let’s face it; nobody wants property in a distant and barren wasteland. In short, location is king and has been for centuries. When evaluating real estate, its location should be foremost on your list. But why is location important?
Well, a property’s location has a significant impact on its value. Plus, it affects its desirability to potential buyers. Factors like proximity to amenities such as shopping centers, schools, restaurants, parks, and transportation hubs often drive up demand for particular properties. Additionally, location in a specific neighborhood or area may help attract higher rents or increase property values over time.
What’s more, the location may influence neighborhood safety and security when purchasing a property. For instance, property owners living in a safe area tend to have more peace of mind and are less likely to relocate to other areas. Similarly, living near emergency services such as hospitals or police stations can give buyers an added sense of security.
For business entities, location is the key to success. A business’s strategic location can help it attract more customers and generate more sales. Also, commercial real estate in prime locations often commands higher rents and sale prices since they are considered more desirable investments due to their proximity to markets and transport hubs.
Whether you plan to make a long-term investment or snag a great deal on a new home, the location matters. Likewise, investors should consider the future potential of a property. For instance, if city planners intend to develop a particular area, an investment may be more attractive due to the anticipated gains.
Cost
Whether you’re a buyer or seller, you probably have a budget for your real estate fund or price in mind. Sellers also expect to maximize profits from their property, while buyers want a fair deal. As such, the price or cost is a significant consideration on both sides of the negotiation table.
Generally, a property valuation determines the cost of a particular property. A valuation is an assessment of a property’s current market value based on aspects such as location, size, demand, local crime stats, and condition (more on this below).
A professional appraisal relies on comprehensive and accurate data to determine a property’s value, helping buyers pay the right price for a property, especially if they plan to get a mortgage. Likewise, a seller should be aware of their property’s value so they are not short-changed.
When buying or selling a property, related costs such as closing fees, commissions, transfer taxes, and inspection costs should also factor into your equation. Hence, as you go house hunting or list your property, know how much you can realistically afford or expect from the sale.
Here’s a quick example to help drive the point home: following an appraisal, a seller will typically set their asking price. Meanwhile, a buyer uses the same assessment to determine if the seller’s price is reasonable or if they should negotiate a better deal.
If the going rate is too high, the seller may need to lower their price or let the deal fall through. And with knowledge of their property’s worth, the seller can choose between multiple offers or price their home or property right.
Condition
Are you hunting for a new property or an existing one? If the option for the latter, consider its condition.
A property’s general condition determines its market value and desirability to potential buyers. As such, real estate investors consider variables such as age, wear, and tear, upgrades, or the presence of pests or other damage.
For example, an older property with outdated features may require costly renovations and repairs before being sold or lived in. Such a property might also attract higher insurance premiums than a newer home. Plus, maintenance costs can eat into your profits or budget if you rent your property out.
In contrast, a new or existing property with modern updates, such as new appliances, upgraded bathrooms, and excellent curb appeal, can have a higher asking price and tends to attract more buyers. Similarly, buyers will be more inclined to purchase a home if they can move in right away or if the property requires minimal renovations.
The same goes for commercial or industrial properties. Hence, buyers should inspect the building for signs of wear or damage. They should also check for zoning restrictions and other legal matters to ensure a legitimate investment.
While other aspects are worth considering, these should top your list when buying or selling a property. That way, both parties can reach a well-thought-out agreement, ensuring a satisfactory transaction.
