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Every property investor in Guam wants a good deal on their real estate purchase. Location and condition are 2 key factors in determining whether a particular property is a wise purchase.
While price also matters, it might not be so easy to find a property that can be fixed up with minimal effort. There may be hidden problems and issues that crop up that are not easily identifiable during the inspection process.
Being able to determine at a glance if a property is a worthwhile investment takes a keen eye. Here are a few tips to help spot a good property for investment in Guam.
Know what adds value to a property. As an investor, it’s essential to do your homework in determining what factors add value to a potential property.
In some family-oriented areas that consist of predominantly family homes, the proximity to good schools, shopping centers and public transport are important.
The value of living in Guam may be defined by proximity to the sea or elevated views of the mountains and sea, and modern architecture.
Security and secure parking is critical everywhere. Established areas, where rental demands are high, are known for its abundance in inventory for investment properties.
Determine if it meets your objectives. A pure investment buyer would be more concerned with monthly property returns.
Make sure you CAN rent. Do proper diligence in finding out if the property you are looking at falls in any specific zoning that allows legal rent.
Your investment should also meet your financial goals. Some investors follow the “1% rule.” If the property’s potential rental rate is 1% of the sale price, then it’s worth looking into further.
There is also the “50% rule,” where you make sure that mortgage payments (exclusive of taxes and insurance) will be less than 50% of the rent you’re expecting to earn. Otherwise, you stand to earn very little or close to none in the long run. A steady income from rental fees will ensure that you will be able to manage the amortization payments should you decide to finance it through a loan.
Partner with a real estate professional. A real estate investment involves a large financial risk, and you would want to make sure you make the least number of mistakes as possible. Tie up with a reliable real estate professional, with whom you can trust with all your investment goals and requirements from which he will base his search for you. A good real estate broker is well-informed about the latest trends and will be able to guide you through your property search more efficiently.
Look into foreclosed properties. Although forfeiture is the last thing anyone would want for themselves, sometimes it can’t be avoided that someone else’s loss may be your gain. And you can be sure that the property is legitimate if it’s been acquired by the bank.
Since the bank’s purpose is to dispose of these acquired assets, prices are likely to be lower than fair market value and terms may be negotiable too. Banks usually have a comprehensive list of foreclosed assets as well as accredited brokers to handle these for them. So you might want to take advantage of the situation.
Spotting the right property investment requires a lot of research and strategy. Mistakes can be very costly and it’s always best to equip yourself with the right information from the get go.