Characteristics of a Bad Property Investment

warningYou’ve probably already researched and read tens and thousands of articles and advice regarding property investments from types to myths to requirements to financing needs to pretty much everything else but have you considered looking through the things that you should avoid?

If you haven’t then you’re in luck because we have made the following list of characteristics that define a bad property investment.

Almost or Fully Depleted – An asset is given a monetary value which shall be distributed across its years of use. Every year, a rate called depreciation shall reduce it. When one invests, it is crucial to take a look at the remaining worth of the asset. It would be silly to buy something that barely has any value left.

Awkwardly Located – A good investment is characterized by convenience in location. In other words, it is easy to reach. Transportation is present and readily available and significant establishments (e.g. schools, hospitals, grocery, etc.) surround the area. A bad investment on the other hand is completely opposite. Transportation is hard making the asset hard to go to and from. Significant establishments are far away too.

Little to No Appreciation – Depreciation is a given and it is a cost that all property investors and owners will have to deal with. However, one crucial element that must be given adequate attention to would have to be the appreciation rate, or the potential that the asset can increase in value over time given the right factors. An appraisal can be brought about by many factors a few of these will include the presence of establishments and structures within the vicinity as well as renovations and updates.

High Ongoing Costs – Some assets may appear affordable at the onset but becomes very hefty in the long run. A famous example of this would be properties that come with high ongoing costs. These pertain to repairs and maintenance expenditures necessary to keep the functionality of the space.

Ownership Cases – One of the first things to do when acquiring a real estate investment is to ensure that the person selling it has the right to its ownership or has been given the authority by someone who does. Avoid closing in on a property that has a lien or something similar on it. That is a surefire headache waiting to explode.

When you spot the following characteristics to a property investment, you’d know what to do. Run away and flee!

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