5 Signs of a Bad Property Investment

real estate investment mistakeNot all investments are created equal. Losing thousands of dollars in a bad investment can be crippling for many first-time investors even if the costs of properties are moderate in Australia.

Here are some tips to detect bad investment and decide whether to turn it down or turn it around.

Purchasing in the Wrong Area

Location is a big factor that can make or break an investment portfolio. Poor transportation system and distance from the business district can cause property depreciation. Feeding on such opportunities is highly risky that even seasoned investors are ignoring it for the long time.

Overcharging Building Contractor

Contractors tend to give exaggerated quotes. It may seem unprofessional, but negotiating and arriving at a compromise is not as good as it seems. The best way to offset an overpriced contract is to consult project developers. Pointcorp.com.au, for example, provides advice on managing properties, both residential and commercial.

Skimping on Quality

Buyingmaterials only for the price is not always wise. More often than not, quality suffers when using low-cost materials. Significant budget cuts are not always a sign of victory if products and materials are substandard.

Going Overboard

Likewise, spending on highly expensive materials may not be a foolproof way of getting more out of your investment. All the hype subsides and may only leave you regretting your decisions.

Rushing in

Closing the deal is the most delicate part of purchasing an investment. Thinking thoroughly about it and getting a second opinion will help you do this right. Adrenaline rush does not always get you the best, more so with property buying.

Most inexperienced buyers will fall for any scam that may present itself. Learning the basics of property investment helps in avoiding these pitfalls.

If you believe you are presented with an investment that has these signs, stop and think. The results can take a nosedive if the risks are too high. Tread with caution, especially when all instincts say otherwise.

3 Comments on 5 Signs of a Bad Property Investment

  1. Lanny C. Whitesel // January 9, 2015 at 12:37 am // Reply

    This article is almost complete except for some micro pitfall. People tend to get any property with so much bedrooms in it. It’s not productive and cost-effective to maintain a lot of bedrooms that don’t get used.

  2. Janet H. Cardwell // January 9, 2015 at 1:12 am // Reply

    I agree. Some sales talk just go on saying multi-bedroom property seals the deal. Holistic functionality of every room is important.

  3. Margaret A. Kelly // January 9, 2015 at 1:40 am // Reply

    Inexperience could escalate bad investments to worse. It’s enlightening to read on topics like this.

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