These simple tricks can boost your property investment
On one too many occasions I have had an unpleasant conversation in which I have had to reiterate that trying to force down the price doesn’t give you the best value on your investment especially in the long run. For the short run, you might look good, but that’s all there is to it.
90% of them have retorted saying that I am not acting in their best interests and in the long run coming full circle to understand that they should have listened.
Imagine negotiating down on the price of your plots only to realize that with the price reduction you lost the right to qualify for corner plots?
PS: You do know that the corner plots are higher in value than regular plots, right?
A misguided perspective of many investors as relates to maximizing profits and returns is on pushing down the price – and that should be a good strategy but not in times when the pricing narrative has become over-flogged.
To beat a system or circumstance, you must truly understand how it works – same with the social media algorithms that everyone is seemingly obsessed with beating to gain visibility.
Anyways, here are my top 3 ways to gain immense value that optimizes your earning capacity in property investment.
1. BUY IN BULK
Yes, do not buy one unit but at least 2 and if possible aim for 4. Now, hearing this you will likely think that I am crazy and pushing you into a tight position that strains you financially. But no, that’s not the case; but this is where you too need to get smarter with your investing goals.
Point to note: “If you want to go fast, go alone; if you want to go far, go together” – African Proverb. The same applies to real estate. Whilst many think not to expose what they are doing or buying, you should try to have a trusted circle or group whose goals, interests and zeal are aligned so that when you team up, you can get better deals. When you do this and you can get one realtor to represent all of you – even your agency fees will be reduced. That is where the cost-saving on your acquisition cost comes from
2. NEGOTIATE WITH TOTAL PACKAGE IN MIND
Negotiate with the holistic package components in mind, not just the direct cost of the asset. With property investment, the cost of the land or house is JUST the beginning, there will be maintenance/service, documentation, closing and development fees that will make up the total expense of your purchase. So whilst your land cost might be low, all the other costs that aren’t will drive up the cost of the property you get to build and own in the long run.
Point to note: think value not cost.
“Price is what you pay, value is what you get” – Warren Buffet
Your ability to earn more doesn’t just rest on the fact that you can charge higher on your property, but on the notion that your property can be fully booked and/or occupied for a longer time with less of its maintenance being your responsibility.
3. BUY EARLY
This point cannot be overemphasized and whilst many would argue that they need and want to trust the quality of work to be delivered, there is also a valid counterargument that impresses how not every real estate acquisition is bought to be accepted without improvements.
A few of the advantages that buying early has included the fact that you are buying at less than the market rate for what that product will be, you have the flexibility to be a part of the finishing process, and you are more obliged to secure more than one unit as was referenced in point one.
Buying early, in the Nigerian real estate market refers to buying off-plan or when it first launches – that is when the best prices are given.
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- Read this before you invest in that off-plan property
So when it comes to what could be the ultimate guiding principle for real estate investments, Jim Jarmusch put it in very relatable terms when he said “Fast, Cheap, and Good… pick two. If it’s fast and cheap, it won’t be good. If it’s cheap and good, it won’t be fast.”
But then again, advancement and current situations have relatively addressed this with some options being able to relatively offer simulations where you can have all three.
For more information, discussions and strategies on real estate investing, you can contact Lerato via email here. Lerato uses her business social media pages to address, educate and enlighten her followers on the same.
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You may also download her free ebook on real estate here