When you venture into the condo-investing market, your goal is to make a profit. Although real estate is generally regarded as riskier than stocks or bonds, the opportunity for an excellent return on your investment makes it worth the gamble for many people.
The old adage “An ounce of prevention is worth a pound of cure” is especially appropriate for condo investors, whether you are buying your first property or adding to a string of condo holdings. Avoiding certain common mistakes, four of which are explained below, will keep your portfolio in good shape and help you realize higher returns with the least amount of stress.
Mistake No. 1: Not Getting Pre-Approved
In certain areas of New York state and Florida, the real estate market is so hot that when you find an ideal property, you have very little time to act. If you haven’t been pre-approved, though, you won’t have a solid idea of what you can and can’t realistically afford. Schedule an appointment with a mortgage broker and obtain pre-approval before you start looking at condos.
Mistake No. 2: Not Considering Location
If you’re faced with two equally appealing condo opportunities, choose the one with the best location. No matter how attractive the building may be, location trumps aesthetics every time. It’s also wise to investigate long-term plans for the general area. If developers are planning to build a shopping mall or waterfront park in the vicinity of the condo, the investment could skyrocket in value.
Mistake No. 3: Planning on Selling Before the Project Registers
If you are not in a position to get a mortgage when they register, avoid new construction projects. In some places, condo assignments are flooding the market and many of them are selling for amounts far below their original purchase price.
Mistake No. 4: Failure to Obtain Buyer’s Representation
A condo is an expensive investment, and one that should be undertaken with assistance from an attorney experienced in condominium law. Working with the listing realtor is not enough- their fiduciary duty is to the seller, not you. Find a real estate attorney you can trust to represent you as the purchaser.
Like most investment opportunities, condos can increase your personal wealth. The key is proper planning, strategic purchasing, and an ability to both recognize and avoid the common mistakes that may result in serious setbacks. For experience-driven insights and legal advice on your condo investments, contact Rosen Law today. We will explain the legal and practical issues pertaining to both existing and pre-construction condos, so that your purchase is an informed one.