Real estate is a smart and stable investment, but it’s definitely not foolproof. There are some major pitfalls that the unsavvy buyer can fall into if they fail to exercise proper care. This means educating yourself about these obvious traps and obtaining the guidance of an experienced real estate lawyer and real estate agent who can use their knowledge to help you through the process. The lawyers at Adam Leitman Bailey, P.C. know all there is to know about real estate, and can help you avoid common mistakes. You can also read the tips below for a primer on how to be smart when buying property.
Don’t Fall in Love With Real Estate
At the end of the day, real estate is always an investment. Of course, you want to like the place where you live and raise your family, but you always need to be considering the economic pros and cons of the property in the back of your mind. Don’t allow yourself to fall head-over-heals with a house to the extent that you ignore all of the financial implications and wind up with a money pit. Remain practical, and find the nexus between a place you’d want to live, and a place that has potential for a resale value that will net you a profit if and when you eventually sell.
Don’t Buy the Prettiest House in an Ugly Neighborhood
You’ve heard that the key to a successful business is “location, location, location.” This is also true for successful real estate investments. Even if a house is in wonderful condition and full of charm and character, it’ll be impossible to sell if the surrounding houses are dilapidated and the local economy is in shambles. You’re better off with a less impressive property in a more stable area.
Don’t Forget About Interest Rates
When you’re buying property, remember that the asking price isn’t necessarily the bottom line. You also want to remember that the interest rate on your mortgage is hugely important in determining the amount you’ll actually pay for your house over the life of your loan. Don’t get so caught up in finding a house with a sticker price you like that you forget to be picky about your mortgage. Remember, a $120,000 house with a low interest mortgage could actually be cheaper than a $100,000 house with high interest.
Don’t Skimp on Your Down Payment
Most people will need to take out a loan to purchase their house, that’s simply a fact of life. However, it’s ill-advised to purchase a house completely with financing. For one thing, most mortgage lenders will make you buy private mortgage insurance if you fail to put down at least 20% of the purchase price. This insurance could amount to thousands of extra dollars per year out of your pocket. Also, the more money you put down up front, the better off you are in he long run. The small your mortgage, the less you’ll pay in interest and the sooner it’ll be paid off!
Always be careful when buying a house. Real estate is an extremely expensive and long-term investment that should be thoroughly researched and considered before it is committed to. This means working with a real estate agent and lawyer, as well as doing your own homework. It also means avoiding simple mistakes by following the tips above. If you do everything right, then property ownership will be a thoroughly enjoyable experience!