4 Tips to Escape Your Real Estate Woes!

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“Real estate investing is more complicated than investing in stocks because of the financial, legal, and extensive due diligence requirements involved.” [2]

Real estate is the most difficult acquisition for any individual. Amongst buying vehicles, college tuition for kids, retirement plans and buying a house, the latter seems to require the most planning. Of course, this is so because buying a house costs a huge amount of money unless you are buying a cool sports car! Therefore, it is really vital for a person to ensure that they try as many avenues before making the ultimate purchase. These days you can also contact realtors or home sellers online. But with many online avenues, more questions arise as to their authenticity as the people you interact with are complete strangers. Alumni Alliances is an exclusive alumni community that is only available to the members from your alma mater hence you get to interact with people with whom you have gone to college. They might be more helpful than complete strangers!

Let us look at the 4 areas that a first-time buyer should consider while thinking of purchasing a real estate property.

1. Larger Down Payment

Previously, it was mandatory to make a down payment of 20% of the overall price of a property that you wished to purchase. Today, many lenders have decreased the deposit rate to a lower percentage. But is that useful in the long run? When your down payment is lower, then the interest paid on the remainder of the principal amount becomes more. This is because lenders calculate interest on homes on a compound basis. One way to understand the amount of debt that you might owe to a lending institution is to use a compound interest calculator. To help in accumulating funds for a down payment, these are some of the ways as per an online article [3]:

  1. Transfer a fixed amount into a savings account every month.
  2. Skip vacations for a year.
  3. Borrow from a relative.
  4. Sell some of your investments.
  5. Look into down payment assistance. Assistance can also be found through Alumni Alliances. Many realtors post requirements on Alumni Alliances regarding properties that they would be selling. You can easily view these requirements on your newsfeed.

2. Extensive Window Shopping!

Well, this is a no brainer! The amount of time and effort we take in deciding the color, texture, and pattern of a certain shirt takes us through many shopping sites and apps. So obviously there would be countless sprees to various locations just to find the perfect abode. Sometimes it is good to have a look at property listings online. Alumni Alliances, an exclusive alumni community, is a good portal where one can find real estate listings and can connect with realtors directly.

3. The Right Neighborhood

Choosing the right home is not enough! One must also look at the surrounding elements. For example, check out the following reasons stated in an online article [4] on why buying a property in a certain vicinity might be not a good idea.

a.) Roads. The roads leading to your future property could be of poor condition which would result in expensive car repairs. You must also check out the traffic levels in the area by driving around at different times of the day.

b) Safety and Crime Levels. The value of a house is also dependent on the level of crimes occurred in an area. Check out these factors if you are quoted an exceptionally low price for a property you deem to be priced otherwise.

c) Amenities. It is feasible when you have hospitals, general stores, pharmacies, and schools nearby. The price of a property might be higher when compared to a similar one with amenities that are afar. If you calculate the amount of time and money spent on going to and fro schools, workplaces, general stores, etc., you would find that you may incur a lot of costs.

4. Repair and Renovation

If you are thinking of buying a pre-owned property, don’t forget that you would be needing repairs around the house sooner than later. So while you are contemplating buying a pre-owned property, consider getting a quote on the renovation estimates also. This would give you a clear picture of the kind of expenses you would be enduring in the near future. Also, get more than one estimate since it might be a possibility that one contractor could quote you unrealistically low. To avoid any nasty surprises, take two or three quotations.

So, there you go! These would be the 4 broad areas to think about before making your big purchase. Stay tuned to Alumni Insider for more articles relating to real estate. Also, if you haven’t signed up already, then get on board Alumni Alliances to connect with many real estate professionals.

 

Sources:
1. Featured Image – Bailey Starner
2. Huffington Post – 5 Basic Tips for Investing in Real Estate
3. BB&T – Top 10 Ways to Save for A Down Payment
4. NerdWallet – Tips for First Time Home Buyers

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