Make sure to avoid three common mistakes
On my blog, you can find many different articles I have written about investments in the real estate market gained from my experience as a real estate investor.
I have repeatedly said that, from a financial point of view, buying a house is a mistake. Why? Because the purchase of a first house is primarily an emotional decision linked to sentimental factors. That said, there are certain circumstances when buying a house can be a good idea.
If you decide to go ahead with a house purchase, there are three principal mistakes to avoid.
Ignoring the real costs of the property
When looking for a home, your attention is often focused on the purchase price and the cost of the mortgage. It is easy to lose sight of the total costs involved in the purchase or of the hidden costs of a property: taxes on the house, costs for early repayment of the loan, real estate agency costs; restructuring costs; condominium costs, costs for parking, insurance, heating and so on…
Buying a house entails significant expenses in addition to the actual purchase price. It is essential to consider all aspects before impulsively proceeding with a house purchase.
Ignoring the resale value of property renovations
So it’s your first home and you want to make it exactly the same as the houses you see in home furnishing magazines. Or, you want to organize the space in the way that you like it and therefore you spend huge sums for the renovation and decoration.
Stop for a moment and ask yourself the following questions:
Is it worth spending 1000€ per square meter for a restructuring that, at best, will enhance the property by around 150€ on the market?
Does it make sense to spend 30,000€ in custom furniture that will be unusable in another house?
I have seen apartments renovated according to ridiculous criteria without regard to the resale value of the property or the concerns of an average buyer to whom you are selling.
Before tackling the restructuring of your home, ask yourself: Who is the average buyer? Would they like two bedrooms or a large hall? Does the restructuring increase or lower the market value of the house?
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Choosing a property by following your heart
You have found the perfect love nest. But have you considered that the property has structural problems that could turn your investment into a disaster?
If the owner is ready to negotiate a lower price, it might work. But if not, you have to decide whether to pay an elevated price, or forget about the property and keep looking around.
It can be difficult if you’ve decided that this is the house of your dreams but you should choose a property with your head, not your heart, because it is the heart that will pay for the price for any mistakes made.
Be sure to ask an expert: surveyors, lawyers and architects can help you discover the hidden costs of a real estate transaction. This is extremely important especially if you are looking for a house where you are planning to live.
Until the next meeting with your financial freedom