How to Recognize a Bargain Property
Looking for a bargain property does not only involve looking for houses that are priced low. If you want to buy a bargain property, you need to know why it is priced low, and what challenges you will be taking on if you decide to go ahead and make an offer to purchase.
Sometimes buying what is perceived to be a cheap property will end up costing you more in the long run because of the immense amount of work that is required to make it livable. The same applies to houses that are in good nick, but priced way below what would normally be “market value” simply because of location or the neighborhood in which they are located.
So how do you recognize a bargain property that really is a good deal?
First of all you need to ascertain for yourself why any property is cheaper than others. It might be that the house is seriously run down, or it might be a foreclosure, or there may be some other more sinister reason – a murder for instance.
Then you need to assess what you will have to do to increase the value of the property and/or fix things to make the house a good investment or home. You need to weigh up the pros and cons, and do the math.
Helpful tips to help you recognize a bargain property when you see one
Establish what houses that are a similar size and have similar facilities have recently sold for. If the asking price is considerably cheaper it could be a bargain property.
Even if the house needs attention, it could still be a bargain, but to establish this you will need to estimate renovating costs relatively accurately. An inspection will help you establish what exactly needs to be done. Add these costs to the price of the house, and you’ll soon see if it’s still potentially a bargain property.
Generally major structural repairs including foundation upgrades, extensive roof repairs, as well as plumbing and electrical overhauls, will be costly and will often change people’s minds even if they desperately want to buy a bargain property.
Even if you think you recognize a bargain property staring you in the eye, ask yourself whether its poor condition is the only reason it’s marked down. Other issues might include a bad design, poor placement of the house on the plot, or even accessibility. If it’s on a busy road then this would also affect the price – and this isn’t something you’re going to be able to fix. Or maybe someone died here recently.
Once you have established the why and how much you need to invest in fixing whatever is wrong, you can make the final decision whether or not to buy a bargain property.
No comments:
Post a Comment