Investment Realestate

REAL ESTATE INVESTMENT: Tips for Investing in Real Estate

how to be successful in real estate investing

It is common that the investor, when looking for the safest form of investment, chooses to purchase real estate. Real estate investment is really something very attractive, especially because of the good income potential, whether by real estate valuation, or by the constitution of monthly income through leasing, for example.

But is investing in real estate really always safe?

The answer is no.

In addition to analyzing the strategic location, according to the purpose (whether commercial or residential) and evaluating the structure and size of the property, for the business to be safe it is also necessary to be careful.

Thus, we prepared this article pointing out some tips that we believe are essential for your security when investing in real estate.

01. In real estate investing, make sure the seller is the owner of the property.

Although it seems, in a way, obvious, this is a fundamental tip to prevent structural fraud in the business involving the transfer of property. Many assume that the sell is or are the owners of the property, but they don’t verify.

Unfortunately, it is common, after payment, to discover that the “seller” did not own the property. And in some cases it turns out that he was a mere possessor. If the intention was to transfer only ownership of the property, then care and calculations are different. However, in the case of real estate investing, it is rarely attractive.

But how to prevent this?

Obtaining an updated certificate of registration of the property from the competent Real Estate Registry Office – whose constituencies are divided according to location.

For example, in Curitiba there are nine real estate registry offices, each responsible for registering properties located in predetermined neighborhoods. On the attached map it is possible to identify the Property Registry that covers the location of the property of interest.

Another point that can be misleading is to think that if the person presented the deed of purchase of the property, in his name, then he is the owner. Although for some this statement seems strange, but the deed is not the document that proves ownershipIt is the updated registration of the property that, in principle, proves ownership.

The purchase and sale deed must be registered in the property registration to transfer the property. According to the Civil Code, the transfer of real estate only takes place through the registration of the deed in the competent registration of the property. Therefore, it is not sufficient for the purposes of demonstrating ownership that the seller presents the deed of purchase that acquired the property. Demand updated registration!

02. Check if the property to invest has tax debts

There are cases in which the owner of the property may have tax debts pending payment, which are levied on the property.

This is because, even if there is proof of registration of the property, without any burden or encumbrance, following the tip above, such document is not sufficient to certify the absence of debts.

Thus, before purchasing a property, it is important to check with the City Hall if there are taxes pending payment by the seller, as is the case with ITBI and IPTU.

As a rule, the owner is not able to transfer the property, with the proper registration of the legal transaction in the registration, if there are ITBI debts. However, it does not apply to IPTU.

The IPTU is an obligatory tax that is legally called “propter rem”, that is, it accompanies the property.

Therefore, in view of the negotiation that results in the purchase and sale, the buyer becomes obligated to pay IPTU pending in relation to the property, even if it corresponds to a previous period, when the seller was still the owner.

The recommendation, therefore, is not to stop purchasing a property just because there are tax debts pending payment (which is very common and would then make the investor lose opportunities), but rather to identify such pending issues.

By identifying the debts, it will also be possible to negotiate the value with the seller, so that the amount can impact the price of the deal.

03. Check if the owner is a defendant in lawsuits

It is common in real estate transfers that appear together with the specification of the legal transaction, the following information: “dismissed certificates of deeds filed” or something like that.

The justification that some present is to accelerate the transfer of the property. However, this is not a good practice for investing in real estate.

However, if you intend to acquire a property as a form of investment, there is a need to anticipate all situations that could be harmed before closing the deal.

Therefore, dispensing with the presentation of certificates mentioning the actions that the seller appears as defendant may characterize risk, including subject to the cancellation of the legal transaction of purchase and sale.

For example, in the event that the seller has, for years, owed amounts subject to judicial execution, which was not registered in the registration, but, despite this, the buyer waived the presentation of certificates in the act of disposal of the property.

In this situation, the seller’s creditor could judicially request the annulment of the legal transaction. Because, it could constitute fraud (in the sense of harming) the judicial execution.

Thus, in addition to knowing if there are lawsuits against the seller, it is important to analyze them.

Therefore, it is recommended to count on the support of a law firm with strategic performance in real estate law .

04. Technically inspect the property

Some precautions when inspecting a property are extremely important. The state of the property can be the defining point of whether the property investment will be a loss or a profit.

For example, if the property is newly painted, it is possible that some damage is being concealed, such as leaks that generate mold and the walls are dark or stained. Ripples in the floor can also be a sign of infiltration.

The hydraulic and electrical situation of the real estate property is a common problem.

This, however, is not always possible to identify in the survey, since the connections may be disconnected.

Thus, even if there is a possibility for the buyer to claim their rights for hidden defects in the property, it is interesting to state in the contract that there was no prior inspection. Or, that the inspection will be carried out later and this will influence the business.

05. Choose to invest in properties of increasing appreciation

If your intention is only to generate investments with the property, be it commercial or residential, focus on new areas and neighborhoods.

Population growth and the ultimate increase in property demand can quickly increase the price of your property, even if the purchase is not in conjunction with buildings.

Therefore, focusing on these regions of increasing appreciation is something that is strategically recommended.

The enthusiasm to acquire an aesthetically beautiful property, at a price below the market, can make you, the investor, not to give importance to some of these precautions.

However, postures like this will make the legal business unsafe.

Thus, the tips described above are intended to help you not risk your business, making investments in real estate in a safe way.

However, these are just some precautions that should be taken in real estate investments. The particularity of the real estate case is that it will require or not the adoption of other measures. Therefore, the ideal is to use a real estate legal consultancy specialized in the real estate market.

 

You may also like...