The harsh reality is that buying and selling a property is not as glamorous as the TV shows make it appear – the process has its roadblocks and never-ending expenses, and you may as well say goodbye to your weekends while you are at it. When approached correctly though, buying and selling a property can be a rewarding experience.
The dream-like feel of our favourite lifestyle shows have left too many people blind to some disastrous and irreversible mistakes. With a comprehensive property investment portfolio under his belt, Zaki Ameer knows the numerous property pitfalls individuals frequently fall victim to.
Zaki shares five irreversible property mistakes that are made all too often:
Spending too much on pre-sale renovations
Of course, if you’re selling a property you will need to fix any holes in the walls and usually a new paint job doesn’t go astray either. However, a general rule-of-thumb is you should get back, at the very least, the amount that you spent on the renovation otherwise it isn’t worthwhile. There are also two specific situations in which you should NOT renovate before selling:
If you purchased the property in relatively good condition for below market value and the interior of the property isn’t brand new, but fitting a new kitchen or bathroom will not guarantee an increase in its value.
If the market is in a volatile state, because you cannot improve or renovate your way out of a market that is going downhill.
Lack of insurance:
Forget that red wine carpet stain, the real stuff of nightmares is finding out you’re not insured for certain larger damages. No matter how miniscule the chances of flooding or fire damage may seem, your property needs to be insured in case the unlikely does happen. No new property owner wants to be stuck in a situation where they are left making loan repayments on a building that no longer stands.
Inspections are the dirty side of the property market. The last thing anyone wants to do on a Saturday is trawl through a property playing detective and picking up clues to a possibly dodgy house. But it’s a necessary pain to endure as failing to inspect a property with a fine-toothed comb can later turn into a costly mistake. A house may look good on paper and even better when eyes are first laid on it, but without proper structural and termite reports, buyers can get stuck with a seemingly perfect house that is actually ridden with problems.
Letting loan rates run wild:
Many inexperienced home buyers shrug off the importance of interest rates. It is important that you lock down a fixed loan repayment plan, ensuring you don’t experience an unexpected price rise that can potentially jeopardise your living situations.
When you first enter the property market you must keep the mentality that this is a long-term plan. Many people abandon their property far too early for a slice of the profits, but the longer you wait in the property market the bigger the slice you will get.
The Carousel thanks Zaki Ameer, the Founder of Dream Design Property (DDP) for this article