Factors to Look Out For When Buying Property
Throughout the year, millions of individuals will become real estate investors as they purchase houses for sale. Whether buying a property for immediate use, investing in a home that will be rented out to tenants, or finding a home that has great potential, there are countless real estate investment opportunities that are just waiting to be explored. However, choosing the right house for sale is made significantly easier when you know the key factors to look out for.
What Factors Should You Examine When Looking At A House for Sale?
No matter the country, there are two important investment factors that you must consider before you decide to buy a property.
One of the most important factors that you can consider when buying a house for sale is its location. You will need to answer the following questions before you can determine the optimal investment location.
1. What is the status of the neighborhood?
2. What are the nearby amenities?
3. Is the home located in a good school district?
4. Is the home near warehouses, transport hubs, or public transportation?
5. Does the property qualify for any tax-exemptions?
After you have answered the questions in Factor #1, you should take a look at the long-term and short-term view of the house for sale. In other words, examine both the home's and the neighborhood's history. Has the real estate market remained steady or has it had numerous ups and downs? Has the value of the home continued to increase over the years or has it remained unchanged?
To further answer the previous questions you can take a sales comparison, cost, or income approach. The sales comparison approach will require you to examine the recent sales of comparable properties in the area to determine the true value of your potential investment property. If you take the cost approach, then you will need to conduct a cost summation minus the depreciation value of the home, to determine if it is a suitable investment opportunity for a renovation or tear down. Finally, through an income approach you can use expected cash inflows to determine if the property represents a good rental opportunity for future tenants.
Country Specific Buying Factors For Real Estate Investors
There are different factors to consider when investing in property, whether in developed countries such as the United States and the United Kingdom, or emerging economies like China and the United Arab Emirates. Note that these factors are designed for foreigners investing in out-of-country real estate opportunities.
Foreigners are entitled to the same real estate opportunities as citizens within the U.S. However, the financial limitations that foreigners might encounter revolve around the U.S. capital gains taxes, as well as the real estate taxes, which must be paid to the U.S. government. Generally speaking, the foreign seller will also have 10 percent of the gross purchase price of the home withheld by the U.S. IRS.
While foreigners can buy properties in the UK, many banks will not offer investment loans. In addition, you might be asked to pay up to a 40 percent deposit. Finally, you will have to explore the tax implications of your investment decision.
Foreigners don't have any restrictions on the types of properties that can be purchased in China. However, it is advised that foreigners work with an agent who can serve as the liaison between the developer or owner and the buyer.
Purchasing a property in the UAE will require you to examine the status of the actual home. As a foreigner, you can only purchase properties that are entirely located in a freehold area designated for foreigners. In addition, you can own the property either via title deed (100% ownership) or a lease-to-own deed (certain areas depending on the land rights) . There is an array of choice for singles, families and investors. Dubai has ‘Investor Laws’ that protect the investor, visit www.dubailand.gov.ae for more information.
The moral of the story is simple, if you want to make a sound real estate investment anywhere in the globe, then you must consider a multitude of financial & legal factors. These financial factors will play a crucial role in your ability to later assess the individual attributes of the property. By working with a trusted real estate professional from Realopedia, you can greatly improve your ability to properly assess the important factors that must be considered whenever you are buying investment real estate properties.