Real estate is among the safest investment vehicles you can trust with your money. When looking what to do with your nest egg, consider real estate- residential or otherwise- generates an average ROI of at least 1% every single year. But doing your homework before giving away any of your money is critical so you are never left holding the bag.
There are a few red flags to look for before you consider the actual property itself.
As you have heard, location is everything. The idea to buy on the right before the area starts to upswing is the safest for getting a sound ROI. There are a number of factors to consider in this regard. First, if the neighborhood has a bad reputation for high crime and has had this reputation for some time now, it may be hard for the area to shake it. This will result in a much longer period of investment. Also you have to consider what the comps in the area are going for; if you haven’t seen much shift on prices over the past year, you may want to walk.
In the midst of the housing boom, in the high development areas across the sunbelt- especially in Florida, builders looking to cut corners and save money bought cheaply-made drywall. Stating in 2001, China began exporting to the United States this defective drywall which contained so many chemicals, it actually corrodes the copper components to air conditioner units, appliances and electrical outlets.
This chemical composition in conjunction with the especially warm and humid climates across the Southeast United States excelled the breakdown of the drywall. The especially high emission of sulfur from the easily degraded drywall was thanks to manufacturers having authorized high ratios of pyrite in the fly ash- a key ingredient to drywall composition. Also present in the cheap drywall is iron and sulfur reducing bacterium, responsible for foul odor.
Beware of the presence of this type of drywall before deciding to invest in a property, especially if considering a property built between 2002 and 2007 in Florida. It is incredibly expensive to abate the presence of Chinese drywall, as you must remove all copper components throughout the property and reinstall sufficient drywall. The signs to look for include blackened components which are supposed to be copper in appearance and the odor of sulfur.
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