Ok, the time has come to open that wallet, pull out the money, and invest in a property, in a real property. You start to look for a good bargain home because you probably have heard that property prices are lower than ever. But what should be avoided is paying too much for what a property is truly worth.
You may now be thinking that you wouldn’t pay too much because the “experts” have already told you that you will make money in the future when you sell. But look again at what those experts say. The best time to make money is not when you sell but rather, when you buy the property. This makes sense because if you don’t make money when you buy a property then you are more than likely to have trouble recuperating that money when you sell it. The best thing to do to save yourself from this loss is to look for a good bargain. To do this you must know the common reasons for paying too much for property.
One of the most common reasons for paying too much for a property is that you fall in love with it instantly. The house appeals to your emotions and you want it yes or yes so you settle on a deal without haggling or further investigation. This is when you have to stop and think because you are probably never going to recuperate your losses. More common reasons are that you think the location is prime and you don’t think about the costs or the investment you will have to put into the house to buy or to resell. It all comes down to you not thinking about the loss and all the extra money you will be putting into the house, plus taxes.
In the end the money you put into your property is your decision, but be smart before making any move. Be sure to punch the numbers and lay out the costs and how long it takes to recoup those costs so that you don’t end up paying too much for your property.
Fall in love with the deal not the house! You are doing this because you want to flip this house and make money, not because you want to live here for the rest of your life. I will repeat this because it is a golden rule: “Fall in love with the deal, not the house!”
Topics: Bargains, Budget, Buying a house, Fix and Flip, Foreclosures, Investment Property
