Things to watch out for in out of state investments
The birth of the Millennium has been a breakthrough for many investors since it was around this time that Real Estate investors soared high by means of investing on out-of-state properties. Investors flood in to areas of hot markets such as in the beachfront areas of Florida and in the cosmopolitan district of Las Vegas.
Many of those investors made it big until early last year. Before the end of 2005, however, their profits started to take a downward spin because of little things that they failed to oversee. They missed out on familiarizing their selves and designing their marketing approaches with the common norms of the states where they venture into.
Below are common shockers to look out for when investing an out-of-state property:
EXTRA EXPENSES
There are states that add up bulks of extra fees from registration of the business establishment to surveys to transfers to closures. Taxes also differ from state to state, so we must make sure we are aware of this before we start doing business at a certain state. It may be that one state has a hot real estate market but it also has high tax rates.
NO-LEASE POLICY
There are some Real Estate Developers and Homeowners Organizations that prohibits homeowners from leasing properties. It is every buyer’s responsibility to inquire about the existence of such policy as early as the property purchase phase. Bear in mind that ignorance excuses no one. So better be sure to read and understand the content of your contracts well.
CAPITALISM
Capitalism is the name of the game. Large corporations purchase bulk properties in a much lower price and they sell it again at a higher price to local investors. The result is, these smaller investors end up renting or buying a property at a price higher than its actual market value so the supposedly expected profits are decreased.
NO-SELL POLICY
Some investors have this policy prohibiting selling of properties for a specific period of time after it is purchased. This is not advantageous to the part of investors because in the event that the venture wouldn’t do well in the first few months, they will be forced to let it that way until the “no-sell period” expires. It is only then that they can pull out the investment and venture it to another.
Many of those investors made it big until early last year. Before the end of 2005, however, their profits started to take a downward spin because of little things that they failed to oversee. They missed out on familiarizing their selves and designing their marketing approaches with the common norms of the states where they venture into.
Below are common shockers to look out for when investing an out-of-state property:
EXTRA EXPENSES
There are states that add up bulks of extra fees from registration of the business establishment to surveys to transfers to closures. Taxes also differ from state to state, so we must make sure we are aware of this before we start doing business at a certain state. It may be that one state has a hot real estate market but it also has high tax rates.
NO-LEASE POLICY
There are some Real Estate Developers and Homeowners Organizations that prohibits homeowners from leasing properties. It is every buyer’s responsibility to inquire about the existence of such policy as early as the property purchase phase. Bear in mind that ignorance excuses no one. So better be sure to read and understand the content of your contracts well.
CAPITALISM
Capitalism is the name of the game. Large corporations purchase bulk properties in a much lower price and they sell it again at a higher price to local investors. The result is, these smaller investors end up renting or buying a property at a price higher than its actual market value so the supposedly expected profits are decreased.
NO-SELL POLICY
Some investors have this policy prohibiting selling of properties for a specific period of time after it is purchased. This is not advantageous to the part of investors because in the event that the venture wouldn’t do well in the first few months, they will be forced to let it that way until the “no-sell period” expires. It is only then that they can pull out the investment and venture it to another.
posted by realestatevegas | 9:52 AM
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