Investing in real estate is always a big decision. For novice players, many things can go wrong, and they will go wrong. In such a case, you must always consult experts as they can offer you guidance and leads while you are investing in real estate. Mohsen Motamedian is one such pioneer in the industry, and if you want, you can reach out to his company to seek guidance around real estate investment. We also understand that it is not possible for each one of you to reach out to Max Motamedian and consult directly.
In such a case, we have documented the points that Mohsen Motamedian has shared, and you must consider these points before investing in real estate. These points are very comprehensive, and they can help you a great deal in understanding your goals for investment. So, let us now move on to the next section and go through more details about the points to consider before investing in real estate.
Points to Consider Before Investing in Real Estate
Below are eight points that you must consider before investing in property. You can read through these points, and we assure you that you will be able to gain a lot of knowledge after that. So without wasting any more time, let us check out the details now.
- Higher Commercial Yields
As per Mohsen Motamedian, the first and the most important thing to know is that the rental yields are higher for commercial properties when compared with residential properties. You may get a smaller area in the commercial property at a given cost, but the rentals would be much higher. So, when you are investing, give preference to the commercial property over residential ones.
- Location of Property
The next point to consider is the location of the property. Max Motamedian says that you must invest in semi-urban properties compared to rural or urban properties. Urban properties can be expensive, and you may have to hold the rural property for a longer time to get better returns. You must also buy a property in good neighborhoods or developing neighborhoods.
- Background Check of Seller & Property
Many people miss these points, but it is essential to complete the background check of the seller and the property. Ensure that the seller and the real estate agent have a good reputation. The property should not be disputed, and it should have an active mortgage. Ensure that the buyer clears all the liabilities before finalizing the deal. You can also check if any criminal record is associated with the property and the seller.
Max Motamedian says that don’t blindly go by the valuation of the property as per the seller. You must check the valuation of the properties in the neighborhood. In addition, you must also hire an independent evaluator. Check the valuation of the property from multiple sources. The seller would usually try to quote a higher price.
Going by the last point, Mohsen Motamedian tells us that it is important to negotiate the price that the seller quotes. You will be able to save a couple of thousands by negotiating. If you hire a real estate agent, then they will take care of the negotiations.
- Investment Goals
Another important thing before making an investment decision in real estate is your investment goal. If you need money in the short term, it would not be a wise decision to invest in real estate. Usually, the horizon of real estate investments is considered to be long-term. So, don’t buy a property with short-term goals in mind.
- Government Approvals & Permissions
In some cases, you might need approvals from the government to make the deal. Check if there is anything similar in your case. In addition, you must also check if you would need any approval for modifying the property. All these things should be checked to avoid legal trouble in the later stages.
- Patience & Stress Sales
Max Motamedian says that never hurry into the deal. If you are impatient, the seller can take advantage of the situation. In addition, you can look for stress sales to get a discount on the property purchase. Being patient and looking for the right opportunity can help here.
- Hire a Real Estate Agent
All these things may sound complicated, but if you hire a real estate agent, they can take care of all these things for you. They can also help you connect with the seller and explore the properties.
After going through these points, you would have more idea about real estate investment. You can consider some of these points, if not all. For example, we are sure that if you have never invested in real estate, you would not have known that it is possible to negotiate the property’s price. You can also make all these things easy for yourself by hiring a reliable & trustworthy real estate agent.