Real estate is an ideal investment because it tends to rise in value long-term. There is a finite amount of land that can be purchased in any given city or town. People will always need homes to live in, and many businesses will need land to launch or expand a business. Even so, not all real estate investments have the potential to turn a profit. Experienced real estate agent Bruce D. Strebinger has experience buying and selling multiple residential and commercial properties, and he offers advice to investors who realize they’ve made a bad purchase.
First, Strebinger explains, an investor should identify the root cause of the problem. Was the home inspection process too rushed, leading to unidentified, costly problems that would be difficult and expensive to repair? Is it impossible to keep a good tenant in the home because of problematic neighbors? Did real estate prices plunge in the area due to events outside the investor’s control? Do needed renovations cost far more than originally anticipated?
Identifying the root cause of the problem can help an investor not only find solutions but also avoid future mistakes. For instance, finding a new home inspector can help prevent huge home repair and renovation bills. Conducting careful local research before making a purchase can help one understand the market in order to avoid bad buys. Talking with the neighbors before buying a house in any given neighborhood can help one catch problems that an estate agent doesn’t have to disclose, but that could affect the home’s overall value.
After identifying the problem, Bruce D. Strebinger recommends careful research in order to find the best possible solution. In some instances, an investor may want to hang onto a “bad purchase” because there is the possibility the land will rise in value in the future. Neighbors move, population shifts lead to changes in demand, and new developments can positively impact the value of properties in the area.
In other cases, focusing on only the most important renovations can enable one to upgrade a house on a budget so the home can be sold at a profit. On the other hand, Strebinger emphasizes, that there is a time to cut one’s losses and move on. Selling a property at a loss isn’t an ideal course of action but maybe the best option if an investor needs the capital to purchase profitable real estate and/or there, is no realistic hope that the property will rise in value in the foreseeable future.
Bruce D. Strebinger advises those who have made what they consider to be bad real estate investments to seek help from others. It’s not uncommon for real estate investors to allow emotions to get the way of making rational decisions. A reliable team of contractors, a seasoned home inspector, and a good mentor can help an investor make wise property purchase and sale decisions.
At the same time, there is no guaranteed way to avoid all mistakes and miscalculations when investing in real estate. Bruce D. Strebinger urges those who have made a bad purchase to learn from the experience in order to improve their odds of future success in the industry.