While the headline may be a play on the ever popular TV series the fact is that knowing when to deal and when not to deal has never been more vital in the world of property. There are many aspects to consider when faced with what could potentially be an interesting property deal and while many investors jump in without due consideration there are some major risks associated with this. There are also many aspects to consider on the sale side, which many people again do not check off the list and may bail out too soon or hold on too long.
While this may seem very obvious there are many people around the world who over pay for a property and end up increasing their costs when there was really no need to. The main thing to consider with regards to price is the fact that no price is set in stone and while you may need to increase your offer to seal a deal (in rare circumstances), you may also get away with reducing your offer. You need to weigh up everything about the property, the area, cost of finance, who you’re dealing with and how much you really want the property.
People can quote the craziest prices for property but at the end of the day the true market price is the price that they accept and people are willing to pay. On the selling side you need to be flexible with regard to a sale as holding on for the extra couple of thousand pounds could scupper the sale and see your property dragged into a recession such as what we are seeing now. Do not lose your sale over a miniscule amount of money!
Never forget, if a deal looks too good to be true then it probably is.
When looking at a potential property purchase many people will just look up the immediate area without considering what is going on in the region and in towns and cities nearby. If your potential purchase is located just outside the major cities but there are plans for a rail network, tram network or some other transportation system the potential uplift could be dramatic in due course. However, on the downside if the reputation of a region is moving downwards and you are being tempted with the last of the big money properties in the region, is this the right thing to do?
When looking at a property you need to consider the immediate region and the surrounding region because these can and do have a major impact on the price of any property.
Those who move into the property market expecting to make a substantial profit over night will be sadly mistaken and could see their own finances stretched in the long run. There is no point in stretching your finances in search of that elusive dream property because you never really know what is around the corner and how this may affect the value of your property. If you place yourself under financial strain there is every chance that you will be forced into making a “wrong” decision purely because of your financial situation.
There are times when your financial situation may worsen more than anybody would have expected, such as in the current economic downturn, but where possible you need to give yourself a buffer between a safe financial situation and one where you may be forced into a fire sale. The less pressure you put on yourself the more chance you will make the right decision in due course.
How many people were sucked in to buying a high value property in the UK and around the world just prior to the recent property market crash?
While nobody could have guessed that the credit crunch would appear from nowhere, there was a growing feeling that the US economy was struggling, which is something that would and has spread to the UK in due course. Even though many people would like to strip the economic and political situation out of the equation regarding property investment it is and will always remain a major element. You can have the best property, in the best property market but if the economy of the country and more worryingly the world is in a major downturn there is very little that you can do.
Plan your exit route
There are many properties around the world which may have been on sale for some time and in some cases possibly look very good value. However, many of these properties have limited interest to property investors therefore this makes it more difficult to plan ahead regarding your exit route. It is all well and good to plan your entry route but unless there is a ready made market in the event that you wish to sell, the return on this property will be exactly zero. You could end up with a property which you are unable to sell and therefore unable to release funds for future investment.
Many people forget a planned exit route and concentrate more on actually buying a property and worrying about a possible sale later in the day. This can seriously backfire on any property investor and is something which should be given great consideration. How long can you really afford to tie-up your investment?
There are many different aspects with regards to a property purchase or a property sale and many may be specific to an individual property or an individual area or even an individual country. The bottom line is that without doing your own homework you stand a chance of opening yourself up to a less lucrative property investment than it may have looked initially.
Those who know when to “play and when to walk away” are the investors who will give themselves a better chance of being around tomorrow and actually making some money. The property investment market is littered with potential potholes, highs and lows and the ability to spot these at a distance is priceless.