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Problems of Residential Property

When it comes to investment it is almost a common belief that property investment opens a riskless, easy and guaranteed way to prosperity. Nevertheless it would not be realistic if we considered residential property as the perfect investment offering the opportunity for ascending returns and no damages.

Higher returns always necessitate taking higher risk. At the contrary taking higher risks does not necessary lead to higher returns. When risk is not obvious or most underestimated, it is more likely that costs become excessive. Some people say that owing any growth asset, like property, is safe with avoidable risks, but risk shows up when one has to borrow money to purchase the property.

Most of the times problems that come along with purchasing a residential property are the following:

There are several fixed costs the owner of a residential property has to pay. It is obligatory to pay immovable property tax as well as other taxes to the Authorities. Further more the owner has to pay for the costs that appear once they have bought the property, such as the insurance the utilities fees and other communal fees if applicable to the type of property. However one can be relieved from the utilities fees in case the property is rented out.

Sometimes problems might occur when an unpredicted need in money comes across you. Your money is most probably tied up to your mortgage and all your savings are given away to purchase your property. This means that your money is not available to cover other needs and you find yourself in the unpleasant position of trying to sell out your property in order to refund your money. This procedure is expected to be time-consuming and frustrating plus that the owner cannot afford to negotiate a better price.

When people buy a residential property asset as an investment they are more likely expecting that in a few years time prices will have risen considerably allowing them to sell the certain property and receive great returns. Rarely yet possible there is a chance that property can decline in value. This will not only minimise your returns but it can also deprive any returns or even cause damages if prices fall significantly below the original purchase price. This problem though is not to worry you as the predictions are optimistic indicating that the prices are bound to rise bringing to the investors great profits.

Owing a residential property can be a problem for those investors who live overseas. It is harder to manage all the issues that appear from distance and dispite the fact that there are several companies that are involved with property management, your concern for your investment is probably going to lead you to travel from time to time to Cyprus to check if the residence is maintained well. If you are renting out your residential property you might find that the tenants do not take care of your property as their home and this is when renovation costs rise, not to mention that it will take a small search to find a company you trust to take on renovation.

Finally if you decide to sell your residential property after some years it is almost certain that you will have to renovate the residence in order to attract potential purchasers. The renovation costs will be a bigger problem if you do not have the amount needed for this rocedure and you jave to wait for a loan aproval. Additionally the renovation might take some time according to the workload needed.

Any investor should always keep in mind the negative aspects and problems that are consequent to your newly bought residential property.

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