Buying a house is considered by many as one of the more direct real estate transactions that is comparable to buying an item off a supermarket shelf. I have heard people refer to it as a form of cash and carry, meaning that what you see is what you get. The central idea is that you go for an inspection of the property and after negotiation has been concluded, you pay and move into the property. This is an extreme simplification of the process and there are several missing elements if this is what you have in mind.
Most first-time buyers and inexperienced investors often assume that they know all there is to know about buying a house because of the above emphasis on the ease of buying and taking possession of what you have seen and paid for. The fact is that many people actually see but only a few people have the knowledge and the skills required to analyse and interpret what they have seen. Buying a property is more than the physical building if we want to make a strategic decision to buy or not to buy.
The first thing to capture the mind of most buyers is the look and feel of the building. This is a product of design, fittings, paintings, finishings, furniture and other aesthetic items. These elements are arranged to wow the buyer. They are indeed important but they should not be allowed to cloud our mind and prevent us from looking at the more fundamental elements. The truth is that these items are sometimes used to distract people from the most fundamental elements in which the property is deficient.
No matter how attractive the building may look, focus your attention on the structure and the quality of the work. There are several prime locations where the soil requires technical handling in ensuring that the foundation of the building is strong and will last. Many times the integrity of the foundation has been compromised through unreasonable cost savings. In some instances, when you go for property inspection and you notice some cracks in the building, you are offered a plausible explanation that it is due to the fact that the property is ‘settling’ down. This is an explanation that you cannot afford to accept because if you do not investigate this further and it becomes an issue later, it could cost you all your investment.
One of the factors that many people overlook is the fact that old buildings are not necessarily a bad investment and new buildings are not necessarily a good investment. The critical factor in deciding which of the two buildings is better is to check the structural integrity of the building. There are old buildings that because of the functionality of their design and the strength of the buildings they offer you a better value for your money. They are easier to renovate and they cost you less. There are also new buildings that because of fundamental design and structural flaws, they cannot be cured cheaply. Some of these buildings may need to be demolished entirely if you do not intend to pour money into a bottomless pit.
Another often overlooked factor is the area of safety and maintenance. There are several houses that have little or no regard for safety. The focus of most builders is on security rather than safety. While security deals with external dangers, safety deals with internal dangers. This may be obvious in the positioning of the stairs, children bathroom design, the location of the swimming pool, location of switches and external gas tanks. If there are serious errors in this regard it may be more cost effective not to buy the property than to attempt to correct them.
Maintenance consideration is also a very important but underrated item in the list of many real estate investors when considering buying a house. There are externally and internally beautiful buildings that will cost a fortune to maintain them. If this cost is known to you and aligns with your budget, this should not be an issue. However, if this cost item is not something that you are comfortable with, then you may need to reconsider your decision to purchase such a property. One emerging trend is the inclusion of multiple glass windows and doors in some modern buildings. In Nigeria, there are very few cleaning companies with the capability to maintain these structures.
Buying a house is something very emotional for many investors and the tendency to be subjective is always present. What many experienced investors do is to have a checklist of important items before they start inspecting properties. If the first house that they inspect meets their requirement, they begin the process of negotiation to buy. They don’t continue shopping for what has been found. And if they inspect 20 properties and none meets their requirement, they do not proceed to buy just anything. This is an essential discipline for an investor.
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