5 Unexpected things that you need to ignore in Real Estate

Good day! Today we’re gonna talk about the unexpected things that you have to expect when you are investing in real estate.

Sometimes our assumption gets ahead of us and it’s very wise to know the things that you are supposed to expect and also the things that you are not expecting that are always going to be there in the transaction so that you don’t get blind-sided when you’re closing a real estate deal.

Being blind-sided is always the fastest way for a knockout if it were a sport, and it’s not gonna be pretty when you get blind sided when you are closing one of the largest purchases in your life. That’s why we entitled this particular video, the unexpected things to expect. I know it sounds kind ironic, but it’s true. In most cases when you closely look, you usually get blind-sided with the things that you don’t expect to happen, but they do happen anyway. Sometimes, this really messes up the whole deal. So today we’re going to discuss some of the unexpected things that usually happen in a deal that you have to expect when you’re buying real estate.

The first thing that you have to know so you don’t get blind sided when closing a real estate deal is, “the property will not be taken.”

Sometimes when you’re looking at a property, you like it, everything is good, but you just need to think about it a little bit more, but everything is already okay. Now, the assumption there is “no one will take this property, no one’s gonna buy it, that’s a big-ticket purchase, it will not be gone tomorrow.”

Probably, by the time you go back and you wanna reserve the property, it’s gone. It happens in life. Now, the thing is sometimes it also happens that it’s not reserved but it cannot be higher possibility that someone out there who’s also looking at the property is also as qualified as you. This especially true most especially nowadays, that technology has made our lives run at a much faster pace compare to before.

In the olden days, there might be related through to this because if the people see an ad in the newspaper it just said “two bedrooms for sale” you have no idea where it is, you have to schedule a viewing, and you have to go there to see the property for yourself. After the property showing, you get to decide, think about it, talk to your wife, these entails time.

Nowadays, you can browse the properties that are available in certain neighborhood in your iPad and you may choose to shortlist those things that you like, and usually the property owners including those that are highly qualified ones that are really ready to buy the property are shopping on the internet and they already more or less know what they like. So, at any point in time someone can really take the property without you knowing it. I’ve seen this happen in the past several times wherein you will like the property, and this particular property get taken only a few days and when they got back, since the property that they like is taken they were force to take the property that’s next to it. It’s not necessarily a bad thing, but if the actual property would be so different from the one you wanna take, then that would matter right? Unless if it’s a condominium wherein the layouts are relatively the same but if you’re looking for a customized house and lot and if it’s gone, you’re gonna have to look for another one that you really like. So as far as this first item is concerned, or as far as the first statement is concerned, it’s not always available.

If you like the property make sure you do the proper due diligence steps and make sure you reserve it, if you really it and you feel like it’s for you because it will really be taken. Most especially in this market, you have to remember the property buyers that are also looking at that particular segment are also qualified. Most especially nowadays everything’s online, they have a prior knowledge of the market values in the area. That you’re also looking in.

So, there are also competitor buyers who might also be looking in to getting the same property that you’re eyeing. So, for your peace of mind do due diligence, to the preliminary task, and reserve the property for you if that’s what you really wanna do so you don’t lose out an opportunity you wanna be yours in the first place.

The second thing you need to expect when you are investing in properties is, you will usually hear this, “your money will sleep when you invest it in real estate properties.”

Sometimes, you also hear this most especially when people advice you to invest against preselling properties. Now, whether it’s resale or preselling before we get in to the discussion of investing, let’s first define what they are trying to say. The first thing is we have to define what “sleeping” is, so when you’re hearing this particular advice and they’re telling you that “you put your money in real estate, you’re money’s gonna sleep” you’re gonna have to understand that while they’re just trying to tell you is they just don’t want you to lose the value of your money or they don’t want your money to stay the same in value.

When you put it in real estate, that’s not exactly what’s happening it’s not just staying in value, it’s growing in value. Provided of course you buy the correct ones, right? And there are areas which really have some really really amazing appreciation potential, some areas actually here in the Philippines have really appreciated in value in the past 8 years that you would have never got any other forms of investment.

Your appreciation is cumulative, it’s always gonna based on the market value today. So, the price increase is gonna be based on the price today, not based on the price 50, 60 years way back. So, say for example you got a property for Php 300,000 during the construction stage of a certain village here and right now the same property cost around Php 35-40 Million and you’ve already had this amazing price increase it’s not gonna be based on the purchase price 20-30 years way back, it’s gonna be based on the price today.

So, what we’re saying is that the money doesn’t necessarily sleep because it doesn’t lose value, it doesn’t stay flat in value, it actually even grows in value. But the thing is it depends on where you invest and the correct way of how and where and why you invest, you may buy the correct property but do the wrong things and there’s a possibility you will lose money but this is where the professional will come in to give you a few advices to what to do, and what not to do, where to place it, and then how to grow it.

As far as letting your money sleep for the purposes of this discussion it’s not necessarily true for real estate. So, you have to watch out on these types of advices.

The third unexpected thing that you will hear about real estate is, which is actually untrue by the way, “buy a property and you’ll never have to work a day in your life.”

Well, it’s good for the real estate investors to hear this but it’s not exactly absolutely true because there will also be some sort of work that will be required for you when you are maintaining a real estate.

Owning a property will be like owning a small business, there will always be something left to do so when it comes to saying that statement wherein “you’ll just buy a property you don’t have to work in your life” that’s more of like a metaphor. And it generally is a statement of oversight on the smaller details that you have to worry about on a regular basis when you’re renting out a property or owning a property for profit as far as that is concerned.

So, when you own a property, you’re gonna have to worry about paying the maintenance dues, settling the real estate property taxes, making sure that the tenant’s needs are assisted, the aircons are clean, the grease trap is clean, you know all of these things. There’s some routinary work that has to be done because as we say the property that’s generating income should be considered like a small business.

Another thing that you have to expect that you usually don’t expect in a deal is, “it’s so simple.”

This is the quickest, easiest, fastest way to overlook something. Sometimes, it’s so easy to overlook a sale. It’s just a sale, copy the deed of sale, put the details there then you’re good to go. But remember you’re doing one of the largest purchases in your life, what are the warranties? When are the deadlines for the taxes? Who’s gonna fix your paperwork? What’s gonna happen? How much are the penalties for every delayed payment? When are the deadlines? How much do you need to pay? The thing is you have to know these things ahead or in advance so that you don’t get in to unnecessary stress of going after the seller, asking for some documents, even after when the sale has been transacted. It’s good if you’re both amicable it’s very easy for you to reach him anytime. What if the seller is based abroad? And you won’t be able to contact them and you forgot to get their contact number and you already fully paid them and there’s no way that you can reach them already. It’s gonna be difficult.

Well, maybe in this day and age you might find a way to reach them eventually but will cause you unnecessary stress if you’re not able to address these concerns ahead of time. Or probably worse, if we’re talking about liens and encumbrances have you even done due diligence before you purchase the property.

So, this particular point is simply to expound in your awareness that there are things that you have to consider or expect or take a look at before finally drawing up the deed of sale and closing the property’s purchase.

The fifth thing that you have to expect when you’re purchasing a property that you will usually hear and half a thing is true is that, “this is better.”

I know, someone will always come in and give you advice cause normally when you’re buying a property, it’s the largest purchase in your life, so you go to your relative or your trusted friends you’re gonna ask them about “Is this the right decision for me? Because I can’t decide, it’s an important thing.” So when you’re actually deciding to get property and someone is trying to give you an advice but just like a one size fits all for him“Oh, always get agricultural land”, “Always get a big land”, “Always get a condo in the city, nothing gets to beat that”

You know, they might be giving you a one sided advice, my advice is listen to them take in the good points, listen to the other party who has an opposite advice take in the good points, and the best is always to do your own due diligence and you know, make a decision of your own. Because each real estate situation or each problem that involves a real estate solution will always be unique to your experience as we discussed in our previous videos, this will almost always entail a lifestyle design and it’s not just a purchase decision.

There’s always no one size fits all solution for everyone in real estate and that includes everyone in whatever kind of scenario you’re in, you have to think it through, you have to do the due diligence required and you need to have a certain decision after you review the lifestyle choice that you need to take when you’re purchasing your real estate.

So, what did we learned today?

You have to ready yourself to hearing these advices and you have to understand that although this might be founded in good intentions you have to understand that you have a unique situation, you have to understand the lifestyle that you wanna design for yourself.

You have to understand the goal of buying the property then you have to check the facts and what actually happens on the ground, in reality, before you actually pull the trigger on making that purchase decision.

So, I hope today’s video was able to give you a better idea as far as what things to expect that are usually unexpected advices so that you will be able to create a well-informed decision when you are purchasing a real estate investment.

Thank you and  we look forward to seeing you again.