Do you remember how in last lesson Did we warn you to be careful and select properties for investment based on their quality? So, today's material will be useful for those who decided not to listen to our advice and buy homes that are too neglected. Just the name of the term alone is enough to convince poor investors that buying such "treasures" is not worth it.
❝Money Pit – real estate, the costs of repair and maintenance of which significantly exceed the potential profit from its resale or rental.❞
The reasons for such a significant difference between profits and costs, between expectations and reality can be hidden defects, outdated communications, respectable age of the building itself, etc. We suggest considering the most common scenarios:
- due to your inattention, overly flattering words of the seller and his skillful manipulation, you did not notice the defects. If you get away with a few scratches on the marble countertop, God bless them, but if we are talking about problems with the foundation, floors, roof or communications, the repair will cost a penny. New owners who have collected the entire set of troubles and in general it will be easier to demolish the house and build a new one in its place;
- too large and not very new facilities may require higher maintenance costs, which are not always worthwhile. Especially a lot of money can go to a private house, since it is worth taking care not only of it, but also of the surrounding area;
- the problem with payback arises due to the wrong selection of the location. You can invest a fortune in the repair and decoration of an apartment, make it really premium and refined, but if it is located in a neglected area, you will not be able to raise its price to the desired heights. You simply won't find a buyer, so you will have to either rent for a not too large amount, or lose a lot of money when selling;
- sometimes unforeseen problems with the legal part of the case may arise. Violation building regulations, illegal self-build or done wrong replanning will become a real bone in the throat when selling and redecorating real estate.
In order not to fall into a money pit, it is worth conducting carefully inspection of the apartment or at home and land plot, on which it is located. It will not be superfluous to enlist the support of a specialist, because his trained eye detects even the smallest troubles much faster and more accurately.
Example of use:
— Hello, how is your new dacha? When will you call for barbecue?
- But never at such a pace.
- What for? Something happened?
— It turned out that all the ceilings had rotted, and with them the wiring. Now everything will have to be redone almost from scratch. I fell into a real money pit.
We suggest not to take risks with real estate. If you want to fill your pit with money, and not the other way around, choose your object wisely. Our expert will carefully inspect the property and make sure that it is the dream property country house will give you an unforgettable weekend and good profits.
