10 + 1 words of advice for the “super intelligent” investors who want to lose their money by buying an apartment in the center of a city
* the article was first published on the 10th of April 2012
The majority of people still invest in apartments without even following the basic rules…
Ah, where are these good old days? Prices were rising every single week, so you were a smart investor no matter what you chose to buy. Next month you could sell it for more. And if you made a wrong choice, you were not the one to blame. The bank was responsible, for giving you the loan. Certainly the Real Estate consultant as well, plus many other professionals who showed up in your life.
Nowadays things are a bit more complicated and there are many voices who urge you to change investment strategy, work with experts and secure your money. But be careful: You don’t have to listen to them! You are capable of doing everything by yourself. You know better after all!
But in case you wish to make sure that you will lose your money while investing in an apartment in the center of a big city, then please remember the following words of advice:
1. Don’t create an investment strategy
(You are brilliant anyway. Who could challenge this objective remark?)
You have a vast life experience in every filed, so in Real Estate as well. Don’t lose your time planning your investment. You want to buy a property in the center of your city, so go for it. In time you will think of the details as well. Questions like “why now?” “is there a better location?” “what will be the added value?” “how easy will it be for me to resell it?” and similar ones are only for amateurs, not you.
2. Don’t prepare a list of priorities.
(You will think and decide on the spot)
What is this? Why lose time and bother your brilliant mind thinking about which are the top 5 most important priorities for you and the top 5 biggest problems that you don’t want to “encounter” by investing in a property? You know everything, you don’t need to ask anyone else. Your investment priorities and profile can be reduced to “I know best. I will buy the best property at the smallest price”. Full stop.
3. Don’t collaborate with professional Real Estate consultants
(They dare to ask money for their services!)
Sometimes you think that all these people claiming they are professional Real Estate consultants should be punished for saying big lies. First of all, you know more than them. Secondly, what is their expertise? They come and tell you things you already know. They ask for huge fees, just to verify simple stuff. They offer properties after they verify what your strategy is. “Whose strategy? Mine?” you think “And who are you to judge / verify my strategy?” Better stay away from them, they are not for free and they even ask for contracts to sign (they don’t know your word values more than a German bond. More pity on them…)
4. Choose the wonderful species of “taxi drivers / Real Estate brokers”
(You may receive other “bonuses” as well)
On the other hand, there are many specialized people in the Real Estate world. Some stupid people call them “taxi drivers”, due to the fact that they just take you from one property to the other, knowing nothing about it and without caring to understand your needs. Well… this is wrong and you know it! This lovely species includes many people who will offer you their services without asking for contracts and other stupidities. If they get a commission, it will be an amount you decide on. Plus sometimes you may invite one of them for a coffee and he / she will come. So, you never know…
5. Accept to “submit an offer” to the property owner through your “taxi driver / broker”
(It is certain that he will protect your interests)
It is absolutely normal for you to accept submitting your offer to the owner through the “taxi driver / broker” you choose to collaborate with. Who will dare play games with you? In plus, he is a serious person as well, you can see that from the way he talks to you (even if he does not always kiss your hands, thanking you for letting him be around you). He will protect your interests in the best possible way and it is very unlikely that he will try to play games with the prices.
6. Don’t check the building’s structure and a potential red bullet
(If there is a problem, the owner should have told you)
These wrong perceptions have to end one day. What is this? Paying engineers to check the resistance of a building? Searching for the red bullet in the archives of the municipality? You have friends who will tell you all these for free. Plus if there are any problem, the owner would have told you so.
7. No reason to check the neighborhood for infrastructure, schools, problems etc.
(All the areas in every city center of Romania are described as “perfect”)
When you find a property that looks good in our yes, eyes like a hawk, it is more than certain that everything will be ok. Once you scanned the whole building upside down, even if there are problems, the administrator will be scared and he will solve everything, just because you are moving there. No reason to check for schools in the area, infrastructure, transportation etc. If you want to live there, the mayor himself will come to ask you what you need in order to feel comfortable. (You will have very lucky neighbors …)
8. Don’t ask a professional lawyer to study the property papers
(In Romania we never heard about fake papers for a property)
Romania had never had any kinds of problems with property documents. You never hear of people who lost their money buying a property with problems, which could be easily avoided if they just paid a lawyer for this. No, a professional lawyer is not needed. He will ask for money and this request will be completely unjustified. What does he know that you don’t know? They go to college, pretend that they learn something and they behave as if they are the important ones… You know better, all will be ok.
9. Don’t lose time making a budget for the renovation cost
(You know better. You will check once you buy the property)
The owner will communicate his estimation for the renovation works to you. You should believe him. Atthe end of the day, who knows the costs of renovation better than a high school teacher, or an ex colonel in the army, or a nurse? They have life experience, so they will be honest with you. Don’t lose time with construction companies etc., or by going yourself to DIY stores. You will figure it out when the time comes. (And if at that moment the cost is 4 times higher than what you expected, you will blame the filthy owner who tricked you, together with the stupid broker who did not prepare a business plan for free for you).
10. Don’t perform a market research for the right loan
(All banking products are designed with respect for their clients)
All banks are perfect, the same stands for credit brokers. No one will offer you an expensive product, which is not designed for your needs. Actually all loans could suit you, this is well known in advance. Market research means loss of valuable time, while you have more important things to do (read informative newspapers like Can Can, Libertatea etc., watch Daniela Crudu and Bianca Dragusanu on TV etc). Everything will be ok, no need to stress about “the small print” in contracts etc.
10 + 1. Buy fast, pay as little as possible, don’t lose time on details. People come and go, but you know better
(People should be happy that you were gracious enough, accepting to work with them)
During this process, you have to make sure that you will buy a property quickly, because time is money. So what if this is the only time in your life that you will buy a property and this asset represents many years hard work? You should not lose time on details. Also you should not believe all these inexperienced “peasants” who come and ask for your money. You know better and they should be grateful for having had the chance to meet you. In the future they might even remember the experience and share it with their friends.
It is certain that you already knew all these small tips, plus millions more. They guarantee you will be happy because “you did whatever you liked” when you bought an apartment in the center of a city.