¿How to avoid scams when investing in real estate?

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¿How to avoid scams when investing in real estate?

Posted by Tayrona Inmobiliaria on 27 June, 2024
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One of the most important and profitable financial decisions a person can make is investing in real estate. However as with any lucrative market, there are risks and potential scams that can affect investors who are not aware of what they are investing in. It is essential to be well informed and take appropriate precautions to protect your investment  in this context.

Here are some tips to avoid scams when investing in real estates:

Before investing, do thorough research  

  • Research the seller or company, review their history, look for references and review their online reputation.
  • Research the property and make sure there are no hidden problems, visit the property in person or hire a professional inspector. 
  • Review legal documents and check that all documents, including property titles, building permits, and tax records, are in order.
  • Seek advice from real estate agencies. An expert real estate advisor will help you make good investment decisions and mitigate the risks of possible scams.
  • Carefully evaluate offers that are too good. If a deal seems too good to be true, it probably is. Research carefully before making a decision.
  • Make transactions safely, avoid paying large sums of cash and use secure payment methods.
  • Research the real estate market to understand the true value of the property. Research and analyze the market in the area you want to invest in.
  • Talk to other investors and ask other investors who have worked with the same seller or in the same industry.
  • Request independent appraisals. Hire an independent appraiser to determine the exact valuation of the property.

 

After investing, be on the lookout for short-term rental scams: High alert!

 

Modus operandi: Scammers lurk on short-term rental platforms like Airbnb, renting attractive properties at convenient prices. Alleging unforeseen events or falling in love with the place, the scammer proposes to extend your stay, this time through a direct payment outside the platform. The informality of the new agreement favors the scammer, who is freed from the protections offered by the platform and settles comfortably without paying a cent more.

Problems with the platform: The scammer feigns technical problems with the rental platform, making regular payment impossible. Under the pressure of the supposed problem, the owner, desperate not to lose income, agrees to receive payment in cash, falling into the scammer’s trap.

Consequences for the owner:

  • Financial Losses: The landlord loses expected rental income and faces the arduous task of evicting the delinquent tenant, a legal process that can be long and expensive.
  • Property Damage: In some cases, these unscrupulous tenants can cause property damage through neglect, misuse or even vandalism, generating additional expenses for the owner.
  • Reputation stain: Once the scammer leaves the property, they leave behind an empty space, outstanding invoices and can even damage the accommodation’s reputation on the platform, negatively affecting future reservations.

 

Investing in real estate can be a great way to grow your wealth. It is essential to be aware of the risks and take appropriate precautions to avoid scams. By following the tips above and working with a trusted real estate agent, you will help protect your investment and achieve your financial goals.

 

At Tayrona Inmobiliaria, we are committed to helping our clients invest in real estate safely and profitably. We offer a wide range of services, including:

Investment advice: We will help you find the right property for your needs and aspirations.

Price negotiation: We will negotiate the best possible price for the chosen property, considering the investment potential.

Legal procedures: We take care of all the legal documentation related to your purchase.

Property Management: We protect your property in future medium and long-term rentals. We look after your interests as an owner.

 

Contact us today to learn more about how we can help you invest in real estate in Colombia safely and profitably.

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