For you who want to utilize property for generating quick profit or use it as personal residential, there are several things you have to check cautiously before deciding to purchase any kind of property. Making the decision carelessly only leads to loss of your money similar with playing at http://184.108.40.206. The most important thing is you have to understand your needs before purchasing the property.
If your goal to purchase any kind of property is simply to get any profit and revenue from the ownership, then you have to understand the world of investment properties in the first place. We have to differentiate between investment property and buying property for personal use. Investment properties is purchasing any type of properties in order to not use it as primary residence.
When you decide to invest some of your money in property, then you need to analyze the best type of properties so you can invest on it effectively. Generally, there are about 3 types of investment properties which will be discussed in the next chapter. Briefly the three types of investment properties are consisted of commercial properties, residential properties and mixed-use.
Pro and Con with Investment Properties
Each of the type offers you with different pros and cons. That is why you have to understand investment properties deeply before jump into this business.
By investing in properties, you can potentially generate some earnings from interest, rental paid, dividends, and even royalties. The form of income and value you will get is based on the kind of investment property you choose.
To be able determine the best use of the properties, as an investor, you have to conduct several in-depth studies. You have to examine the value in each properties based on the potential income and the type that offers lowest risk. This is known as the property’s best and highest use.
For instance, you better choose mixed-use property, for both commercial and residential use when the property is in commercial and residential zoning. Then, you can assess the pros and cons of choosing this type of investment property. You can also evaluate the pros and cons from other investment property type.
When you ascertain which property offers the highest possibility earning return with lower risk, you can utilize the building or real estate property in that manner.
Concept of Investment Properties
Some people may misunderstood of the concept of investment properties. Most of them referred the investment property as the second home while in fact is not the same case. Both investment property and second home don’t have the same meaning.
Second home is sometimes referred to other type of property building such as vacation property, cottage or apartment in other location. The family who purchase this property not intended to rent it nor to resell it. Otherwise, they intend to use the property by themselves as a retreat for weekends or holiday. Thus the second home cannot be called as investment property since it is intended for personal use.
Until this point, we can conclude that investment properties are not second homes nor primary residences. Investment properties in the form of primary residences or other personal use only makes the investor facing many difficulties to secure financing.
When you sell an investment property, either as a company or individual party, you have to report the selling to the authorities. This will result in capital gains which then give tax implication towards the investors.
Properties is a long term investment opportunity you can choose with high potential in return. You can earn profit by future resale of the property and rental paid. Real estate and other type of properties are not classified as liquid investment since they need long time to resell or getting new tenant.
Simple Strategies to Start Earning from a Real Estate Business. Starting a business and then running it properly is never an easy task to do. It takes a strong effort from the very beginning to reach a somewhat comfortable spot later on. That is just the way it is in any business regardless of the type of the business itself. The real estate business is an example out of many other types of business out there today. It is not an easy business to build especially from nothing at all. Just in case you are planning to run that kind of business, understand these basic strategies to properly run it.
Find Hidden Gems
It is possible to find hidden gems in the real estate business to get a decent profit in the end. One of the possibilities in terms of hidden gems in this type of business is houses to flip. Commonly, some real estate agents turn out to be house flippers. The idea is to find ugly looking or slightly damaged properties to buy as cheap as possible. Once purchased, they will be fixed and beautified accordingly for sale at a much higher price. That is one way to find some easy money as long as it is done properly.
Another choice within the scope of finding hidden gems in real estate business is to search for properties for sale directly by the owners. It is possible that due to some occasions people try to sell their houses immediately without following the traditional channels. The idea is pretty similar to flipping houses about this one. Find the cheap one and do a bit of beautification there before selling it at a higher price for profit.
Renting It Instead of Selling It
Owning a property for sale comes with the possibility to rent it at some points. This is a decent possibility in an area with great tourism tough. Just try to target vacationers to rent the property for their holiday. It is a clever way to earn some more money in between the times of selling the owned properties. Nowadays it is easy to rent a property for vacationers with the help of so many applications and websites about tourism and holiday.
Generate More Leeds Traditionally
In today’s advanced world that so many things are somewhat digitalized, going back to the old times to market a property turns out to be an interesting choice. Direct mail marketing is a thing to do to market properties. It works pretty much the same as targeted ads on any online platform for real. There are several different things to use in doing this old school marketing. Postcards, oversized envelopes, dadu online catalogs, letter-sized envelopes, or dimensional are all okay to use in direct mail marketing for properties nowadays.
So, a real estate business is not just about buying and selling houses. There are some possibilities to consider when trying to earn some profits out of it. It may not be easy but it certainly is possible to make some quick bucks in a real estate business today.
Understanding Real Estate and Types of Real Estate. You may land to this page because you are trying to find out the types of real estate. Do you know what real estate is? Where do the terms come from? While you may know what is called real estate, here we will also talk about how the term was started. Also, we will uncover the types of real estate later, so keep reading.
What is real estate?
Before we get down to the types, let us first examine what the term ‘real estate’ really means. The word ‘real’ comes from the Latin term ‘res’ meaning things and some also say it is from the word ‘rex’ meaning royal. Royal here most likely because in the past, kings are the owners of all land inside the kingdoms. ‘Real’ here means physical or real and ‘estate’ means property. Real estate can be defined as a property with land, buildings, underground rights below, and air rights above the particular land. Even any natural resources like flora and fauna, water, or mineral deposits.
Real estate is real property meaning that not only the land and the buildings but also all the improvements of the land. Real property is distinct from personal property. Real property refers to the land and anything attached to it, and it is immovable. Personal property is a movable property like furniture also fixtures as well as intangible assets such as investments. Renters and leaseholders have temporary rights to the real property. This means that they have possession of the real property in a certain period.
Types of real estate
Now that you have a better knowledge of what real estate is, let us move to the types of real estate.
Involved in this first type are newly constructed and resale houses. Most frequently found for residential real estate is the single-family house but there are also other types of residential constructions such as townhouses, condominiums, duplexes, co-ops, vacation homes, quadplexes, triple-deckers, duplexes, multi-generational and high-value homes.
Included in commercial real estate are malls as well as shopping centers, educational and medical buildings.
Inside the industrial real estate, we can find manufacturing properties and buildings like factories, mines, farms, business parks, and also warehouses. The properties that fall into these categories are buildings in larger sizes with the locations that may have access to transportation hubs.
Included in this type are vacant land, ranches, and working farms. Vacant land has subcategories that include site assembly and subdivision, early developed, reused, or even undeveloped land.
Those are the types of real estate that you should acknowledge. Particularly if you are trying to get into the real estate business, this knowledge is necessary. This because a different type of real estate will have various zoning constructions, the sales will be handled in various ways too. Also check Secrets real estate agents never tell you
7 Secrets Real Estate Agents Never Tell You. Selling or buying a house may make you deal with a real estate agent. However, there are plenty of things they will never tell you. You need to learn about the tasks done by the agents along with how much those benefit you. More than anything, choosing the right agent will sell your house faster. Also, knowing these secrets will help that goal.
Open houses and the benefits
The open house is something homeowners believe will sell the house faster. However, open houses make your agents get more clients in the first place. What about selling your house? Well, it’s still their priority but it doesn’t matter for the agents if they cannot sell your house right away though. New agents love open houses because this allows them to build networks and get to know more people.
Benefits of open houses
Previously, we said that open houses benefit the agents more than the homeowners. This can still bring benefits to homeowners as long as it is done right. When you have a good location and a tempting price point, the house will sell fast as the market moves. Open houses are still critical when you are selling in a fast-moving market.
Scents of the house
According to experts and studies, scents determine whether or not your house can sell fast. Cookies, potpourri, and other complex scents tend to backfire open houses. Also, many people were found spending more time in stores with orange scents than in stores with a mixture of scents. Learning about this may help you to collect things that help to sell your house faster.
We all agree that a mess would decrease the attractiveness of a thing. This is applied when it comes to selling a house. However, don’t overdo it as well. People who are interested to buy your house will be more curious about the layout than dirty dishes in the sink. Make sure you declutter your house but it doesn’t mean you must do it like Marie Kondo though.
Keep even a low offer
Many people will wait a little longer to get a perfect buyer. Do you know that a perfect buyer doesn’t exist? According to a real estate agent, it is better to accept an offer early than waiting for something you don’t know when to come. When your house sits on the list for too long, you will not receive a full price offer. A lot of buyers are not that excited with a property that has been on the list for months. Also read 5 problems that make your home hard to sell
Ask before hiring an agent
Just like hiring other professionals for doing the job, you need to ask what you paid for. You don’t want to throw your dollar for something you can do yourself. Make sure you pay for a good thing. Ask the agent how deep he or she will be involved in this selling process. Make sure the agent is worth the money. Scams don’t say if they are scams. If possible, ask your friends or family members for recommendations before hiring a real estate agent.
5 Problems That Make Your Home Hard to Sell. Certain issues may make your home hard to sell. Some of them can be fixed and the rest might need extra efforts to sell it. Generally, a house can be unsellable due to age. You need to take action especially if you have lived in that house for long. In this article, we have several tips and solutions you can check to sell your home faster.
#1 Major house system issues
Major house systems could be a reason why your house is hard to sell. It could be electric, gas, or water. Since those aspects could be an enormous challenge for the buyer, they don’t want to invest in an expensive budget to fix plumbing, electricity, kiu kiu online and other equipment. Repair is another thing the homebuyers don’t want to deal with.
The good thing is that you can find out about this issue early and fix it already. Make sure you work with professionals because those are not a task you can do yourself. Besides, your goal is to sell this house, right?
#2 Increased humidity
You may live in a humid area but you can manage your house to feel homey and healthy at the same time. Humid conditions are not favorable by homebuyers even though the condition doesn’t cause major discomfort.
Humid could wreck furniture, lead to moisture and mold, and may cause allergies. No one wants to get sick after all. This condition also forces homebuyers to turn the conditioner on – which means a higher electricity bill.
#3 Bad location
Besides the building, people look for good neighborhoods and surroundings. When the house is located near a crowded spot or even a crime-ridden neighborhood, it can make the house hard to sell. Liquid mostly depends on the buyers’ needs, family status, social, and preferences. So, how can you sell the house if the location is not preferred? Reducing the price may be appealing for the buyers.
People love natural lights. On the other hand, if your house lacks this aspect then it can be a problem. Dark rooms cannot display the advantages of the house, wholeheartedly. The atmosphere, nuances, and those aspects are part of buyers’ considerations.
This problem is fixable. You may try to use more mirrors and let the natural light get into the house. If necessary, move furniture away from the openings or natural light sources. Remodeling your house by changing the windows into the bigger ones and adding skylights are a good idea as long as you have the budget.
#5 Outdated interiors
According to real estate agents, an outdated interior with tasteless and messy decorations may make a house unsellable. It is important to update the look of your house both inside and outside before putting it on the list. Even repainting the interior could make a major difference.
So, if you think that your house looks outdated then you may start to think about affordable changes. Buying new furniture may seem too much but you can replace the seating, repaint the surface, and so on.
Hiring a Real Estate Agent – Is It Necessary?. Hiring a real estate agent may seem the best decision you have ever made when it comes to selling or buying a house. Is it as simple as calling a realtor and let him or her take care of the rest? How can you find the right one? Or, is it necessary to hire a real estate agent?
We must say that the answer depends on various factors. The initial factors you need to assess may include how quickly you want to sell, how much time you want to devote to the process, how much money you want to accept as the offer, and how much money you are willing to give the agent. There are several options you can choose when it comes to selling your house – even if you have no experience with that before.
Reasons for hiring a realtor
As long as you can find the right agent, you will get the best outcome. The right agent will give you a full service which requires you to pay more commission. However, it gives you tons of benefits though.
Hiring a highly trained yet well-educated professional allows you to get rid of paperwork and red tape. The agent will do that for you. Errors and omissions won’t bother your mind since they have insurance, which also limits your risk.
Hiring a real estate agent saves a lot of your time. They will take care of anything including weekends tours, staging your house, and so on. As we have mentioned earlier, you just need to hire the right one. Your agent will also coordinate upgrading and repair efforts (of course, with your permission). They have solid networking and contacts to make your house sellable.
A local real estate agent knows well about the local market. He or she knows hor the price points are set and the best place to advertise your house. Also, the negotiations are done by your agent. Your agent will represent you while maximizing the profit. Still, make sure you hire a highly trained, well-educated, and experienced agent.
Reasons to consider not to hire a real estate agent
However, hiring someone to act as the behalf of you may expose you to several things. This may happen if you hire the wrong person. Please do your research before concluding on one name. It determines your future and your house as well.
No matter to whom you give the right to negotiate, you will need to pay commissions. If you can sell the house on your own, all the money will be in your hands. Still, if this is your first time selling a property, you need the hand of a realtor, which requires you to pay him or her. Generally, you need to let 6 percent of the sale price for the agent.
Your agent may be pretty busy. It makes your property got the least attention from the agent. Make sure you choose a real estate agent that will give proper attention. Choosing the wrong person to do this job will lead to frustration, missed calls, missed deadlines, and flopped deals. You don’t want that, do you?
It is not debatable that investing in commercial property will give you more income potential over investing in residential property. Since commercial property will be built on a street that located in the commercial zoning in the city, the rental price will be designed to fulfil business purpose. Thus the price will be higher.
The same is happen as if you want to resell the commercial property. Since the property is located in commercial zoning in the city, you will get more money in return. Just like the income potential return stated previously, you will get return for about 6% to 12% annual return of the purchase price.
Income Potential Return
Beyond of the income potential return you would likely get, you will also face many negative issues in accordance with owning the property. You also have more risk when you build the building in a developing area, such as for retailer store. If your prediction fail, the building will be left unoccupied. No tenant want to rent a store with no or less potential business. See also how to make profit from properties https://stevenclarkerealestate.com/how-to-profit-from-real-estate/
Issues with Commercial Property
These are negative issues you have to deal with when you consider to take commercial property for investment:
- a) More initial investment: Unlike acquiring a residential property, you need to spend more initial investment in order to acquire property in commercial zoning. The high price in the initial investment come from the price of the land used to build a building on it.
The large expenditure to follow when you acquired the property will come from the maintenance cost to repair some part of the building. The part like roof or a new furnace will need to repair anytime in the future. To repair the roof or replace new furnace you might spend $10,000. If you have more customers, you will likely have to spend more costs to repair the facilities.
- b) Higher and various risks: Commercial properties will have more public visitors daily. Thus this may lead any damage to the properties by irresponsible people or maybe accidental act like cars hit parking lots patrons. You also have to prepare some money if someone get hurt while visit the building like slipping on the ice during winter in your storefront.
- c) Time commitment: Unlike residential property landlord, you cannot be an absentee owner who hoping get annual income return on the investment. You have to deal with annual Common Area Maintenance (CAM) adjustment cost which will be the tenants’ responsible, maintenance issues, multiple leases, and public safety issues.
The legal documents you need to prepare when selling a property basically are the same documents you must check when you want to purchase a property. The documents including title deed, occupancy certificate, tax paid receipts, mutation document so on.
Why is it very important to prepare all these legal documents? It is because no one is willing to purchase a property without any legal documents included. The absence of one of the important documents may lead to litigation and future dispute by other party over the ownership of the property. More about investment properties https://stevenclarkerealestate.com/
Here are the list of several important documents you need to complete when you are planning on selling you house and other type properties:
a) Proof of the owner’s identity
Firstly, you have to submit the copy or showing the proof of your identity to the solicitor when you are planning to sell the property. The proof of identity show the owner’s current address, photo identification, and recent utility bill. You can use your passport as well as driving license as a proof of your identity. If you have legal identification card issued by the authority, then it can be used as well.
The proof of identity is very important to avoid anti-money laundering. The rules of anti-money laundering is covering all the solicitor and real estate agents. They will keep the identity document for almost 5 years.
b) Property Title Deed
The property title deeds document is a very important document not only for the seller but also the potential buyer. This document is needed to prove the owner of the property. In this document, there are outline of the property’s owner. If you cannot provide this document, it more likely still in your mortgage provider if you had applied for a mortgage. The document could also be in your previous solicitor.
If you really don’t have the property title deed, you can apply for the “Title Absolute” from the authority. In this case, the authority is Land Registry. When you apply “Title Absolute”, you must able to prove that you are the legal owner of the house or property. You can apply for “Title Absolute” if you already live in that property for 15 years.
In order to acquire the property title deed, you need to submit more documents along.
c) Energy Performance Certificate
This certificate will last for 10 years. The qualified assessor will assess your house performance and issue energy performance certificate. The certificate shows the amount of energy use by your house and how it impacts CO2 generation.
As an investor in properties, you can choose both commercial and residential type of investment property. There are many advantages when you choose commercial and residential building as your type of investment property.
Mostly, developer or/and investor of commercial and residential type building will offer the building to tenants. In each unit consisted of some floor for commercial use and another floor to reside. Commercial properties cover office building, hotels, shopping centers, manufacturing facilities, apartment complexes, or any other commercial purpose https://daduonline888.com. Then mixed-use property will create the upper floor as residential units.
Despite this type of investment property offers you with many advantages as investor, but you need to research many things before deciding. First you have to study whether the location of your property is best used as a commercial purpose. You cannot randomly invest on some property to be used both in commercial and residential. When the location and the condition of the property doesn’t support for any commercial use.
It means that you need to carefully research the commercial zoning in the city. Placing the properties as commercial use in a commercial zoning will give you more award as the rental fee will be higher.
Second, and this is the most important one. When you invest in some commercial and residential type of property, commercial factor is the most thing that will affect the tenants. Thus if you build the commercial properties in a land or in a place where is still developing, you must have good skill to analyze whether this place will turn into commercial zoning. Or at least, have commercial potential in the future.
I have seen many developer and investor in commercial property failed to predict the future of the place where they build the properties. They built a two floor building such as retail store with upper floor being used as residential units. Yes, this building is built on a street which commonly used as a route to go to other city, but unfortunately, there are not many travelers who interest to come by and buy something in this place.
Due to lack of customers, the tenants cannot survive for any longer. They still have to spend more money since the price is set as commercial utilize. While in fact, the property is not more than residential unit since the retailer store doesn’t worth as commercial purpose. But beyond all of these, commercial and residential properties offer you more income potential.
Calculating capitalization rate is very easy to do. If you see the previous explanation, then you will get the most popular and accurate definition of capitalization rate. Capitalization rate is ratio between NOI (Net Operating Income) to the current asset value of the property. You have to sum up all the expenses spent over one year to get the value of Net Operating Income.
In this part, we will give you several simple condition related to real estate property and also http://220.127.116.11. Then we will give you the brief calculation to apply the first formula in order to get capitalization rate. We are not using the second formula in this brief explanation since it doesn’t show the accurate value of the recent cap rate.
Not only that, you cannot apply the second formula to calculate capitalization rate to the inherited or gifted property. It is because the purchase price is zero since the property was gifted to them. Therefore it makes the distribution impossible to compute.
Now we can try to calculate the capitalization rate from the following example:
Suppose you have purchased a commercial property building at the price $ 2,000,000. While the value of NOI you get over one year is $ 200,000. Then, how much the cap rate would be? To calculate it you can use the formula stated above:
Capitalization Rate = Net Operating Income (NOI) / Value
Capitalization = $ 200,000 / $ 2,000,000
Correct Rate = 10%
It means that your property investment can give you 10 percent in return for one year ownership.
Then, how to get the value of Net Operating Income (NOI)? In this case, suppose you rent the building to some tenants which give you income per year $ 220,000. While you have to spent $ 20,000 towards several expenses such as property taxes and maintenance cost. Then it will give you net operating income at $ 200,000. In this example, we assume that the price of the property remains unchanged for one year.
Why capitalization value is very fundamental in the world of commercial real estate property?
This value is very important, for example when you research for the recent sale of an office building that classified as Class A building. If the office building has stabilized Net Operating Income (NOI) of $ 2,000,000 over a year and a purchase price at $ 20,000,000, then it is usual to say that this Class A office building is sold at 10% cap rate.
Actually, there are many version used to measure capitalization rate value. The most popular version to calculate capitalization rate of a property investment is measured by dividing net operating income (NOI) by the recent value of the property. Mathematically, the formula is shown below:
Capitalization Rate = Net Operating Income (NOI) / Current Market Value
What is Net Operating Income (NOI)? The value of net operating income (NOI) is generated by alleviating the expected annual income with all the cost spent in order to maintain the facility and the property building. Not only expenses to do regular up keep to the facility around http://18.104.22.168 and inside the building property, but also the cost spent for paying taxes.
The (expected) annual income can be generated by renting the commercial building property to the tenants. If the tenants only rent the building for less than a year, than you have to sum up the monthly income you get until one year.
The current market value is the recent value of the building property in market rates which valid in the present day. You can also replace the current market value by using the acquisition expense of the building property or the original capital cost. This is shown in the formula below:
Capitalization Rate = Net Operating Income (NOI) / Purchase Price
The second version is the simplest way to calculate capitalization rate (Cap rate) since you don’t need to search the recent price of the property. You only need to calculate all the expense you have spent to do regular upkeep to the facility and the cost for paying the tax which then called as Net Operating Income (NOI). Then you only need to divide the NOI value with purchase price of the property.
Despite this version is simpler than the previous version, the second formula is uncommon in real estate property business. There are two main reasons why this version or formula is not popular to be used in real estate property business.
The first reason is because this formula gives unrealistic calculation of capitalization rate since the purchase price used in the computation is outdated. The real estate property can be purchased in several years or maybe decades ago. Thus it causes the price very low compared to the real recent price of the property.
The second reason why we don’t use this capitalization rate formula because the formula is not giving the accurate representation of the current market value. Whereas we know that property prices fluctuate annually, using fixed purchase price to compute capitalization rate is illogical.
To acquire a real estate, you can either directly purchase the real properties or pieces of land, or indirectly purchase the mortgage-backed securities (MBS) or real-estate investment trust (REITs). The indirectly form is done by purchasing share in publicly traded and it offers less return. Profit From Real Estate.
Indirectly purchasing also gives you less control of the real property. Otherwise, this kind of property investment is more liquid over the real physical property building or land or business at http://22.214.171.124. For you who don’t really understand in-depth knowledge about real estate property investment, the indirectly purchasing property is the best method you can opt.
Opportunities for Profits
The opportunities to get profit by owning physical real estate property are range in the two methods. The methods themselves have not changed over centuries. They are appreciation of the real estate’s value and revenue from leases or rent.
- a) Appreciation of the real estates
Appreciation of the property is generated through different means. As the owner of the property, you can get the appreciation value once you sell the property. The best type of property which gained more appreciation and more flexible to sell is undeveloped land on the city’s borders. The raw land offers bigger potential to develop, construct, so that it will give more profit.
Appreciation value can also come from a land or place with natural resources discovering in it. The price of the land will be increase when valuable material is found inside the land.
The appreciation value for the property also climbs when the neighborhood develops and grows. When the location of the property is in prestigious area or business zoning, then it will gain the market value of the property.
- b) Revenue from rent and leases
You can also get annual or monthly income from property investment. The best method to gain income from property by renting the property to the tenant. Thus you can get monthly and annual income from rent paid. You can choose any type of property to rent. There are two popular types of properties, such as commercial properties and residential properties.
If you rent the raw land with any natural and material discoveries on it, then you can get some royalties from the company. You can also get a free construction on it such as pipelines and cell towers.
You can also gain income from property investment by buying properties sells shares from the owner. This product is known as REITs and MBS investment.
Beyond the option between Investing in commercial property and residential property, actually these two type of properties have good investment potential. Of course, these two type of properties have different financial reward as well as the risks.
You must be familiar with this supposition where the more risk you take in http://126.96.36.199 business, the greater profit you will get. There are no different between property investment and other kind of business opportunity.
Typically, residential property unit provides lesser financial reward than commercial property unit does to the investor. Residential property units including single-family homes and apartment units, while commercial property including retail buildings, office buildings, and industrial buildings. Despite income from commercial unit is higher, risk this unit offering is also bigger.
In order to make decision whether you want to choose commercial type of property investment, you have to understand what is offered by this property. Actually, there are many positive reason why you have to purchase commercial real estate:
- a) High Earning Opportunity: Investing in commercial property will give you higher income potential that residential property. In residential property, you only get most income from monthly rental by personal usage. But things are different with commercial property.
Depending on the area of the commercial property, most of the investor will get 6% to 12% annual return off the investment price. While residential only gives you 1 to 4 percent annually.
- b) Public Eye: In residential property, you should be grateful as a property owner when the tenant at least cares about the condition of the property. Many irresponsible tenant leaves the property freely while he caused any broken condition of the property. You will not face this risk when you rent the property to retail tenants.
Retail tenants have the same interest as yours, the property owner, to keep the building in a good condition. When they let the storefront and the store break, absolutely it will affect the business. None customers want to shop in a broken shop. Thus, you and your tenants will have the same interest to keep the building in a best condition.
- c) Professional relationship: In commercial investment property, you will rent the building to corporate or someone who has business intention. When two party with same intention gather, you can get business to business relationship with the tenants. Therefore it maintains the interaction stay courteous and professional as business partner. The things are different when you rent the property as personal usage.
You have to examine the property’s document and make sure that these documents are comply with the authority’s requirements. To help you deciding whether the investment property is right or not for you, here are the list of basic documents you have to verify before purchasing the property:
a) Title Deed
Title deed is one of the main document that you should verify in the first place. This document simply outline the ownership of the property. Title deed also states the chain of the property owners, the genesis of title and relevant information regarding to the land. You can derive other relevant information from this document.
It is very important that you have to check the title deeds document before purchase any property. Through this document, you can confirm the seller position over the property, whether he has the capacity to sell the property or not. When the title deed document doesn’t state the seller’s name, then you should confirm to the seller who owns of the property. It will avoid future dispute over the property.
b) Sanctioned Building Plan
This document simply states the approval from the local authorities. This “sanction” or actually the approval, will be given by the local authorities based on the building plan and necessary documents submitted by the builder.
Sanctioned Building Plan document is very crucial since it shows the legalized status of the construction building. It is also important to examine whether the building plan has been approved by the authority. You better check the authenticity of the building plan provided by the builder to the issuing authority.
c) Occupancy certificate
This certificate will be issued by the local authorities once the construction finished and the building is ready to be occupied. The certificate is called as “Occupancy Certificate (OC)” or “Completion Certificate”. The certificate implies that the construction building is in compliance with the initial plant and the norms. Therefore the building is ready to be occupied.
d) Tax Paid Receipts
You have to ask the tax paid receipts from the builder or previous owner of the property before buying the property. The receipts will show you whether the tax has been paid or not. When the previous owner didn’t pay the tax, you will be imposed by the penalty once you own the property. The total of the penalty will be 2% per month since the tax payment had not been made.