When you are going to by an investment property, it means you will have to deal with the selling agent. However, you also must have known that the price they are quoting is less than what the owner stated.
Of course it is not illegal because the selling agent will be paid when the sale is made. Buying an investment property is like playing a game. You need the right strategy to win.
In this case, you want to buy the property at the lowest price.
Meanwhile, the selling agent also need higher price than what the owner is willing to take because that’s how they can receive their payment.
The negotiation process is where you need to be prepared to make the best deal.
Deciding the right price when buying property
Buying a property is not as simple as buying candy in a store. It takes time especially in the negotiation process since both the seller and buyer want to get the best deal.
If you are going to buy an investment property, you need to know more about the pricing beforehand. Thus, you will be more prepared. Here are some tips about pricing in buying an investment property:
- First thing first, do your research especially if you are going to do it on your own not hiring a buyer’s agent. Your research will help you to buy a property that is worth your money. What you need to research is the market price. Try to search similar homes with the one you are going to look at. Thus, you will know the fair idea of the price. You also needs to know more about the asking price and the sale price. The one that you should focus on during negotiation is the sale price. Meanwhile the asking price is usually used as starting point for negotiation.
- Another important thing about pricing when it comes to buying an investment property is the valuation. It is important because it is what determines the market value. The strategy you can use regarding to the valuation is to do it prior negotiation. Of course, this is not the most idea strategy since not all seller accept this condition. This may take longer time three or four days but it is worth trying if you really want to get the best deal.
- Aside from doing your own research and doing valuation, you can also ask some questions to the selling agent during negotiation process. You can ask question related to the asking price. You can ask questions regarding to other offers. Try to find out if the selling agent has made other offers or not. This will help you to know if the vendor serious about selling the property. Next question is about the period of property in the market. Try to find out how long has it been there. And of course, you also need to know the reason why the owner wants to sell the property. This will open chance for you to know how desperate the seller is to sell their house.
Keeping a real estate for a lifetime is a good thing, but there are indicators that might force you to sell your property business. Those indicators might not be clear at first, but they can come up, and they will often force you to sell your estate out. selling a real estate is not a recommended action, especially if you are planning on investing for a long time. There are several things that can force you to sell them, though, and most of those things are things that can happen to you anytime soon.
While there is no way of ‘countering’ these causes, you can read this article to prepare yourself about them. By knowing them, perhaps you can mitigate some of the damage before it is done on you, hence reducing your chance of getting bankrupt because of some freak incident. Without further ado, let us begin with the first cause:
When there is something major happening to you or your family
The first cause is the most imminent of causes on this list. Major things in life include deaths, childbirth, marriage, relocation, sudden layoff, et cetera. When all of those things happen, you will either be losing your primary source of income (if you got laid off), or you will lack the income to support a new family member (in case of childbirth or adoption). When those things happen, you might want to start selling your real estate to cover any present or future expense.
When you finally found a better passive income
A passive income is an income that comes passively to your wallet. Passively here means it will come to you without you doing anything more than investing in it. Compared to an active income, a passive income is an income with lower risk (depends on your investment and what kind of job you are doing actively) and a lower return. The good thing about passive income is that you do not need to do anything to make money; all you got to do is to keep a watchful eye on your portfolio and you will earn money passively.
Real estate is a source of passive income, especially if you are renting it to someone else. It is a passive income that can pay well, but that does not mean it is the best-paying passive income out there. Compared to other passive income ‘generators’, owning a real estate requires you to do lots of works (you might need to face the tenants, fix broken things, and many other). Other investment vehicles such as real-estate crowdfunding or even peer-2-peer lending are better alternatives in the long run.
Last but not least, when you are no longer sentimental of your real estate
If you think this is a joke, then you are half-right. Sentiment is not exactly a thing to keep around when you are investing in something, but there are times when you are feeling sentimental about your real estate. Perhaps you have fond memories of that place, making you unable to sell it. There will be times when you will feel jaded of it, though, and that is the time when you should be selling it (especially if it does not provide you with sufficient income). Might not be the thing that will force you to sell your property business, but we want to include it here because there are people who are dead sentimental about their estates (when in turn, selling them can lead to a higher profit for them).
When it comes to keeping a safe business, then, there are several ways that you can do. Definitely, running a business is a thing that can be both fun and challenging. Unfortunately, getting sued is not a fun thing at all and you should avoid running into it- no matter how challenging it is! If not properly dealt with, a lawsuit would leave a huge scar on your company’s reputation. Here, you will be given several ways that you can do.
- Keep company records that are accurate
The first example of the things that you should do to keep your business safe from lawsuits is that your company should always keep accurate records. Not only is keeping accurate reports a thing that distinguishes between reputable and non-reputable business but also a way to keep you safe. The reports, by the way, should include the date and time when an agreement is agreed upon and signed as well as every detail of items that are mentioned in every meeting that your company conducts. Every kind of communications is also needed to be documented. In case of a lawsuit occurs, you can utilize these records to defend yourself and your company.
- Get protection in the form of insurance
To ensure that it is a safe business, then, having insurance protection is a wise thing to do. Although, well, it would not prevent you from getting a lawsuit issue, it is definitely able to separate the business and personal finances of yours when there are financial strains. By having insurance protection, legal fees, as well as costs caused by liability issues, can be covered. But, you will need to conduct thorough research before choosing an insurance company- find out their respective policies and what they would be able to cover.
- Customer service must always be exceptional
The next thing which may avoid you from having lawsuit issues is to provide satisfying customer service. Well, if you do not provide such a thing, then, there is a chance that a customer of yours might get offended and he/she may take a way to sue you- unless you are able to calm him/her down with your exceptional customer service. Your managers and staffs should receive proper training so that they can deal with the situation and to prevent a lawsuit from happening.
- Always be honest and ethical
Well, the last thing that you need to do is always be honest! When practicing a business, companies must always stick to a straight and unshakable moral compass. This thing is very crucial since you need to build a positive reputation by showing that your company is clean, honest, moral, and ethical. If you bend no rules, then, no one would be willing to bend you in return! Always be professional when dealing with your employees as well as your customers so that the chance you get sued is minimal. Well, that is how you create a safe business!
When you are talking about property and business, surely you think about the connection between the two, yes? It is normal for people to think about that, especially in an age where even properties can be turned into a sort of business.
There are two ways of explaining the connection between a property and a business: the simple way and the complex way. In today’s article, we will talk about those two ways. Before we can go there, though, we need to first understand what a property is. So without further ado, let us talk a bit about what is property in general:
A bit about property
When you heard the word property, your mind must have turned to buildings, right? That kind of thinking is partially right because ‘property’ in a business sense is not exclusive to buildings. When a businessman or businesswoman are exchanging conversation and the word ‘property’ was brought up, the businessman or businesswoman’s assumption on the meaning of that word would not be exclusive to buildings only.
They would assume that their partner was talking about the things they have, be it tangible or intangible. Property includes real estate (or buildings, in the common tongue), furniture, equipment, or vehicles. Anything a business owner can get their hands on, it is a property.
In a sense, it is close to assets, and many have thought that property and assets are both interchangeable when talking about business. This is wrong, though, as assets and property are two different words with two different meanings. The common businessmen would say that they are the same, but those who have studied business deeper will understand that the two are not the same.
They are not the same because an asset is like the sub-category of property. To make it simple, everything that is an asset is included as properties, but not all things that are properties are assets. Things like liabilities are seen as properties, and liabilities are certainly not assets.
How do properties relate to businesses?
Like it has been mentioned before, there are two ways of explaining this. For the short one, we will just say that a property is used to determine how successful a businessman or businesswoman is. A business folk who got lots of properties is considered successful because having lots of properties is something that not many businessmen can have.
For the more complex answer, a property can be used to determine the net worth of a person. In turn, net worth is a sort of indicator that tells how rich a person is. A person’s net worth is determined from the amount of property he or she got minus their liability, and a person’s level of success can be judged from how much net worth they got. For example, Bob earns a US$150,000 from working his butt off at a drilling company. He owned a car worth US$200,000 and a house worth US$350,000. By virtue, his asset is at US$700,000.
However, he also needs to pay several loans because Bob earned his capital from loan sharks. The loans measure up to US$500,000, and Bob would need to pay it if he did not want the sharks to freeze his business. This US$500,000 is what businessmen call as a liability. Because counting a net worth requires you to subtract the number of net worth with the number of liability, then the formula would be like this: US$700,000 (Bob’s assets)-US$500,000 (Bob’s liability) =US$200,000 (Bob’s net worth). While Bob got US$700,000 up his sleeve, his real net worth is only at US$200,000.
There you have it, folks. While there is an easy way to connect property and business, the more complex way can prove to be a better way of seeing it because it provides transparency and a clear elaboration on a person’s ledger.
Starting a property business does not always need a big fund. This business can even be run without any fund. The most important thing to start and run a property business is your speaking and marketing skills. If you think you are great at those skills, this business might be suitable for you. So, are you interested to start a property business?
Start It From Your Surroundings
Look at around you. There must be people who have the intention to buy or sell a property. For example, if there is your friend who wants to purchase a house, ask them what kind of a house they want and where they want it to be. This way, you will be able to learn how to start and run a property business. There is no agreement that you have to successfully find them a house anyway. So that you have nothing to lose. However, you still should try to find a house that your friend wish.
Find Prospective Sellers
If you already found a friend who needs your help to find them property, it is the time for you to look for prospective sellers. In order to find property sold, you have to visit residential locations and property exhibitions often. Visit the ones which are held nearly your living area. The location of the property influences the price so that look for information as detailed as possible. So that your potential buyer can get useful information about the property you offer.
Once you have found a trustworthy property seller or property developer, you can offer them cooperation. It will be better if you officially and legally write the cooperation on a paper so that no parties are at loss in the future. Clearly ask the property developer about the details of the property sold, such as the price, the surrounding condition, and many more. Do not forget to ask about the payment method and commission you will get if you successfully sell the property.
Create A Promotion Website
Today in this digital era, the technique of promotion with zero marketing is by using online media. You are able to share information about your property business and promotion through social media such as Twitter or Facebook. You can also create a free website such as blogs. Later, you will be able to find potential buyers or sellers through this website. Online marketing will widen your network so that it is possible for you to get potential buyers outside your area. Make sure you post clear photos of the property you sell, complete with the details.
Make Your Own Brand
If your property business starts to run, you can create your own brand so that your business will look more professional. Find a brand name which is easy to remember and legally register it in order to avoid unwanted things. Buyers will trust more a property business that has a name. However, registering a business brand indeed needs some money. But, it is worth starting a property business.
How to start a property business from zero? The property business is often related to a big amount of money. That’s true for sure. However, it doesn’t always mean that you must prepare a lot of money first for this. In fact, there are many property businessmen out there that gain their success even without any money for the capital at all. So, what must you do? Here are the things you must prepare.
Improve your skills and knowledge
Even if you may not need to spend money on this, it doesn’t mean you don’t need other kinds of capital. More importantly, you must improve your skills and knowledge. Aside from taking a business class, there are some other things you can do. They are reading books with business and economy content, joining seminars and workshops, and listening to the shares from the expert ones. If it is needed, you may take notes of what they say. Now and in the future, those things must be really beneficial.
Learn about the properties
Aside from improving the business skills and knowledge, you must also learn about the properties themselves. There are some properties that are worth enough to sell at high prices. Meanwhile, some others are not. Then, you must think about the strategies so that those properties are sold out well with higher prices. There are many things to be learned about around this area. But sure, the knowledge is priceless anyway.
Build the clients’ trusts
In your area, there must be people who want to sell or buy a house. You may pay attention to it and try to offer help for them. In the beginning, you should not label yourself as a broker or property businessmen, just take advantage tof his moment to show your capability in term of property business. Put a lot of efforts at this point so that the clients can find what they want. Even if the commission you get is not as big as the professional one, at least, it is to build the client’s trust.
Find more clients
In the world of business, relatives and connections are extremely important. Sure, the relatives and connections here are not in the negative perspective. In fact, you need to expand your relationships with people for having more clients and customers. Later, if there are people who need to make a deal related to the property, you can just offer your help and show your capabilities more. This is how a great business starts anyway.
Create a brand and do more marketing
After trying to be a broker or do the property business in amateur ways, now you can start to be a more professional. There are some steps to pass through including by creating a brand. Of course, to build a company, many licenses are required to have. Well, you should prepare all of them. Next, do marketing more diligently. Many things can be done at this point like creating a website, publishing brochures, and more. Along with the trusts from previous clients, your property business will be perfect.