Property is a good investment option as it offers both the potential for long-term growth and the security of owning a tangible asset
However, it can also be a costly mistake that is not easily rectified.
According to Yael Geffen, chief executive, Lew Geffen Sotheby’s International Realty, real estate can provide stability and financial benefits that other investments like stocks or bonds may lack.
Geffen said that whether you are buying property to live in or an investment considering the complexity and the high stakes involved it can be easy to fall into the trap of buyer’s remorse.
Buyer’s remorse is the feeling of regret after making a purchase and it is typically associated with expensive purchases like a vehicle or real estate.
It can often be easily avoided with proper research, professional advice, a thorough evaluation of the property, and an understanding of personal financial limits.
Here are tips on how to avoid buyer’s remorse.
Understand your financial situation
Having an understanding of you financial situation is the first step in avoiding buyer’s remorse.
It can be easy to be caught up in the excitement of buying property but you need to make that you can afford it in both the short-term and the long haul.
“Get pre-approved for a mortgage to know your borrowing capacity, and be mindful of other costs, such as property taxes, maintenance, and potential renovations,” Geffen said.
“And don’t be tempted to stretch your budget too thin just because a house looks appealing. A sound financial plan will give you peace of mind and keep your emotions in check during the property search.”
Know your long-term goals
It is crucial that that your property purchase are in line with your long-term goals. Are you buying a home to live in or an investment property?
If you are buying the property for investment purposes, you need to consider these factors:
– rental income potential
– resale value
– local market trends.
Geffen said: “By keeping your goals in focus, you’ll avoid the common mistake of purchasing a property that feels right in the moment but does not actually fit your long-term plans.”
Do your research
Investing in property requires thorough market research because an understanding of the local market can help you make an informed decision.
Look at trends in the area you are thinking about property in: are home values increasing, stagnating, or declining? Are there major developments planned nearby that could influence property prices?
“Additionally, research property types. If you’re buying a rental property, learn about the demand for rentals in that area, typical rental income, and vacancy rates.
“For a personal home, find out how other homes in the neighbourhood have performed in terms of resale value,” Geffen said.
Signs a property might not be worth the investment
Geffen cautions that even after narrowing down your search, there could be critical signs that a property may not be a wise investment.
“Beyond the excitement of owning a new property, it’s important to carefully assess whether the home is a solid financial investment and a house that looks perfect on the surface can sometimes hide major issues that could turn your dream home into a financial drain,” Geffen said.
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