Tips For Saving Money
Too often, we see that first-time investors or buyers overlook some of the very important cost involved. We call it the hidden costs. These add up quickly, and before you know it, your excellent investment is costing you more money than what you are willing to invest.
Most people believe that you make your money when you buy a property and not when you sell. But here at the Wealth Creators Method, we say you make your money before you buy a property. You make money with property investments when you are doing your calculations, long before you buy any property.
So let me share some of my tips for saving money when buying property.
1. Do Your Homework
You should know this one by now as it is something that we keep repeating here at the Wealth Creators Method, and that is to do the calculations!
If the calculations do not pan out, you will save a lot of your valuable time and money by not pursuing the investment any further.
Make sure you know of all the hidden cost involved in property investments and make sure you work them into your equations.
Costs like:
- municipal taxes,
- rates,
- levies and taxes,
- homeowner’s insurance,
- transfer duties,
- management fees,
Etc.
Make sure you do a property inspection and get an idea of any repairs and maintenance that are needed or maybe needed soon. If you are unsure, get someone to inspect the property for you.
ALWAYS make sure you check the financial affairs of a body corporate if you are buying into one. You will very quickly discover if the properties are managed well and if it will be a whirlpool of issues and unforeseen expenses heading your way.
These costs have a way of adding up, and before you know it, your R1 million investment just turned into an R1.5 million investment without you realizing it.
Make sure you know ALL the cost involved before you sign any documents and make double sure you can afford them before you do.
2. Do Not Pay More Than The “REAL” Market Value
Many properties out there are listed WAY too high. Make sure you understand the market. Most sellers are more than willing to negotiate on the price. Especially motivated sellers.
There are loads of websites where you can find Data on what properties in an area sold for, websites like Lightstone, PropStats and even Property24.
A lot of the time, an estate agent will create the illusion of scarcity on a deal. 99.9% of the time, this is false. DON’T get pressured into buying before you are ready and 100% sure.
3. ALWAYS Negotiate
You will be surprised at what you can achieve with a little negotiation. Best case you get a better deal, worst case the seller declines. Bottom line, you have nothing to lose.
Tip: If you are in a position where you are your own bank, you’ve done the calculations, and they work. Submitting a cash offer will usually get the owner to lower their asking price.
And remember everything is negotiable the real estate agents as well as the attorney’s fee, can be negotiated, not just the initial purchase price.
Tip: The best place to negotiate is the bank.
You can also include some to all other costs in the deal with a little negotiation.
4. Get A Set Price
If you make use of a Rent2Buy finance concept you can secure a properties price in 2019, and only pay for it in 2021, with a small extra amount added to the purchase price.
For a better understanding of the Rent2Buy Finance concept, click here.
5. Pay Of Your Bond Faster
By adding a few hundred or thousand rands to your bond each month you can save, thousands in the long run. The quicker you pay off your bond, the shorter your repayment period, the less interest you will pay. Which can quickly ad up!
Make sure you join us for our next property investment training and discover more tips and secrets about successful property investments.
Tips For Saving Money
