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This was to allow the potential investor insight into profitable real estate investment in the Zimbabwean market.
Real estate trading and investment is one of those industries where one can be effective and make huge profits while maintaining or retaining one’s primary source of income.
Though one can be taught real estate investment or trading (buying and selling) through articles on property investment trends and many investment books on real estate that are available, there is no substitute for practical training.
Practical training ensures that one gets an acute understanding and perspective that separate a small profitable deal from a life- changing one.
The bottom line of real estate investment is finding, funding and flipping properties.
In layman terms, this is simply finding the best property for the least price, finding a way to fund the purchase of the property and marketing the property quickly and profitably.
This in most cases will also involve addition of value on the property, especially where a dilapidated house is in issue.
It is worth stating that the rate of return on value added has an exponential relation to the actual value added, thus the higher the value addition, the higher the return.
It is prudent that the first time investor or new investor zones in on a certain area, give or take a 70 km radius and focus on the properties in that area to allow the investor to have intrinsic knowledge of that area.
One should also look at those properties that are easier to sell, rent or mortgage.
By zoning in on an area, you are guaranteed that within the area, there will be at least five bargain properties and the prospective investor should always be the first one there.
With enough time spent trading in properties in that area, one eventually will know the demand of the area, the rough price guide vis a vis the amount that should be
spent on the property and the rate of demand in relation to property use in such areas.
The next step will probably be the most critical because it is the one where one needs to find a motivated seller.
A motivated seller is one who is open to different offers because of various extraneous reasons that I intend to list, others may call such sellers “desperate”.
Some of the reasons for motivated sellers are bad management, money problems, out of work, out of money or out of luck, illness, inheritance or ignorance, area in decline, attorney problems, estate or probate problems, emergency or early retirement, divorce, death, debts or dissolution of partnerships.
There are numerous other reasons for motivated sellers, it’s the investor’s job to fish them out and meet their need. The prudent investor does not scrounge off the misfortune of others, but looks for ways to create a win-win solution with the motivated seller.
The next question is obvious, how would one find out about these motivated sellers, there are the conventional ways of finding out, which are for example your
classified ads, The Herald being one of the leading in relation to newspaper classifieds.
A common example will be one property being sold by many realtors, this most often is a sign that the seller is motivated to sell and is open for offers. Circle the properties in your classified ads that seem flexible and follow up on them.
Real estate’s are also a good place to start, the realtor is in most cases well versed with the flexibility of the seller and is best suited to advice on offers that can be accepted.
One can also use other sources, like friends and contacts, banks, courts, investment clubs, professionals like accountants and lawyers or whatever other mode that will give an edge over other investors in the market at any given time.
After a careful assessment, choose the property that you feel will give you the most return on investment, remember that you do not want a problem property, what you want is the perfect investment property owned by people with problems.
- Vengai Madzima is a property investment consultant and analyst with Wisdom Properties. He can be contacted on 0772 468093 email: [email protected]
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