Real estate investing is said to be a play ground for the rich. The truth is that most successful Investors started with little and have achieved tremendous success.
Today Real estate have produced over 80% of world millionaires but at the same time, a good number of people have lost their hard earned money, while few others have invested in properties with very slow Returns On Investment (ROI) because they failed to ask the right question, before going into the venture.
Whether you are investing in stocks, bond, mutual fund, crypto currency, foreign currency trading, or real estate, The golden rule is “never invest in what you don’t understand ” .
Today I want to help you with the 5 MOST IMPORTANT QUESTIONS YOU MUST ASK before leaving your signature on that deal:
I decided to write this article after a couple of meetings with some real estate investors. These series of meetings revealed that a lot of people come into real estate as gamblers rather than investors. They neither have business plans nor investment strategies.
With this I present to you the 5 most important questions you must ask and make sure you got the answers right before putting your signature on that deal
Some of them are questions you must ask yourself! and each question form an integral part of detailed due diligence.
Ready? let’s go…
1. What Do I Want To Achieve With My Investment Portfolio?
Before you ever initiate the search for a property, you must come up with a conclusion on what you want to achieve with the property you are looking for. This will help you define the type of property to look for-
- Are you looking for a home for yourself and family close to your work place?
- Are you looking for Cash Flow or Capital gain on your property?
- Do you just want to be a landlord?
It’s unfortunate that so many people treat real estate investing as a gamble, the importance of deciding what you want to achieve with your portfolio before getting started can never be swept under the carpet, because this will help you create a smart real estate business plan, which will guide you in making decisions that maximizes profit.
Do you want to learn how to create a real estate business plan? Click to book an appointment
2. What Location is best for my investment?
Once you have concluded on what you want to achieve with your investment, the next thing you will start thinking about is location that best serves the purpose.
The purpose of investment will determine location and location will determine your returns on investment (ROI).
For instance, you will scarcely get a Cashflow Property in an upcoming city. You will also find it difficult to maximize Capital Gains in a fully grown city except you are skilled in the art of fix and flip.
Recomended for new Investors – HOW TO OPTIMIZE PROFIT WHILE INVESTING IN REAL ESTATE – WHAT THE RICH DO
Best locations guarantees fastest returns on investment if the investing is done right..
Note – Location correlates with purpose of investing and smart Investors are always prudent in the act of timing a deal.
3. When Will I Get A 100% Returns on my Investment (ROI)?
This is always the litmus paper test for a good location and every smart investor ask this question. This also means that it’s smart to decide how long you are going to hold this property and your exit strategy before commiting your money because real estate is not as volatile as stock that can be liquidated at the tap of a finger
- Do you want a generational investment?
- A rental income for life?
- Buy and sell after 10 years?
- buy and develop after 5 years
- Fix and flip?
- A property for Agricultural purpose
- Commercial property for fuel station, hotel, office complex, hostels etc?
- A space for family home etc
Your purpose for investing will always affect the speed of returns on your investment.
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4. Get information on the receptiveness of locals —
Of course, the essence of Real estate investing is to make profit. To maximize returns on investment. But how can you maximize returns when there is too much trouble coming from the the indigenous people of the land?
Therefore, it’s necessary to understand the behavior of the locals before investing in that beautiful location you just discovered especially in upcoming areas.
A lot of people have resolved to buy only ready made homes to escape the problem of Omonile and other local encumbrances, community brouhaha and illegal levies. Unfortunately most developers have taken advantage to double the actual cost of the ready made homes despite the fact that many of these houses are built with substandard materials.
Probably someday everyone might become a developer. Right? But you need to learn Investing first because you wouldn’t like to be spending your money unnecessarily there by affecting the speed of returns on your investment.
Being able to cope with the challenges of most localities across Nigeria is what Smart Investors do.
A Comprehensive due diligence must be done by anyone who do not want to be spending their hard earned money unnecessarily.
5.Verify The Title And Perfect Your Document
Once you’ve been clarified of the number 1 to 4 above and you’ve finally decided to buy that property, the next thing you are going to be doing is verifying the title and once the title is confirmed, and you make your payment, go ahead to perfect your documents and don’t push it into the future. It’s super important to Perfect your documents immediately to secure your property.
To learn more on land titles and documents, read — Land titles and documents that secure my property in Nigeria
The importance of verifying titles and documents on property can never be over-emphasized. Always insist on buying only properties with verifiable titles especially if you are buying properties in Lagos and no matter what company or individual you are buying from.
To verify any property title, get the land coordinates and visit the land registry in your state.
Always insist on making every deal safe and profitable by asking the five questions listed above before venturing into any investment. And most importantly, make sure you buy right!
ABOUT THE AUTHOR-
Anthony Cee is a real estate experts on a mission of helping real estate investors achieve higher returns on investment.
He offers best real estate Advisory and management services that maximizes returns on investment
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