5 Invaluable Property Negotiation Tips For Overseas Real Estate

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In the book Cross-cultural Business Negotiations by Donald W Hendon, there is this story about a US sales professional with years of negotiating prowess in the US, pulling down walls due to his aggressive negotiation skills. He was asked to negotiate a business deal in Japan and he failed because the same aggressive skills that brought home the bacon in the US was considered a sign of weakness and insincerity in Japan. So negotiating on foreign soil presents a little more challenge.

But whatever the reason for negotiating or the country in which you are negotiating, the important thing is looking beyond the surface and understanding the motivations of the other party. This might be hard to do when you have barriers like cultural, socio-economic, political and religious differences. But you can break through those walls and infer the motivations of the other party; study weak points, analyze your strong point and get a win-win result. Here are property negotiation tips to achieve these whether on home or foreign soil.

1.     Be respectful.

Being respectful and courteous tells the other party you’re calm and might signify you have the strong ground. This would make the negotiations an enjoyable ground for you. Moreover, everyone likes respectful people. Likability can work in your favor. But going in all firing with an aggressive attitude and you could be sending the wrong signals.

 

2.     Do not be afraid to ask for what you want.

Successful negotiators are assertive and challenge everything - they know everything is negotiable. Being assertive means asking for what you want and refusing to accept NO for an answer. (Check the difference between assertiveness and aggressiveness). However practicing being assertive will take care of your interests while maintaining respect for the interests of others. When you put your own interests in front of others and with a lack of respect, then you are negotiating aggressively.

 

3.      Listen.

The most popular word in the English language (or any other language for that matter) is "I". Therefore, it stands to reason that most people love to hear themselves speak. Communication is imperative in any negotiation. Negotiators are looking for that point that will unite the two sides and create a platform for a result. Good negotiators ask questions and then listen. The other party will tell you everything you need to know - all you have to do is listen. Follow rule 90/10 - listen 90% of the time, speak 10% of the time. Make a lot of open questions sit back, relax and listen and you will be amazed at what you hear.

 

4.     Be Prepared.

It’s not a good strategy when you have to sit down at the negotiating table and think "I wish I'd known that" or "If I just found out before leaving the office. Know whatever there is about the house, the neighborhood and the state before getting to the negotiating table.

 

 

5.     Always be willing to walk.

Never negotiate without options. If you rely too much on the positive outcome of a negotiation, you lose your ability to say NO. When you say to yourself: "I will walk if I cannot secure a negotiation that is satisfactory," the other side perceives that you mean business. Their resolution will force them to make concessions.

Doing your homework is vital to successful negotiation. You cannot make accurate decisions without understanding both sides of the process. The more information you have about the people you are trading with, the stronger your negotiating power.

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5 Steps to Successfully Buying Your First Overseas Property

  • 17, August 2023

Buying a home abroad is similar to marrying a foreign lady. It's rare to meet a foreign lady in the bar and get married the next day. It requires some investment of time and effort from the first meet. It might take weeks, months or years to know each other first. Then if she says yes, you tie the knot. Hopefully, you're not going to spend years before you make the 'buy decision, though. That'd defeat the purpose of buying a home abroad. By, using the 'marriage' analogy, buying a home abroad requires knowledge; of the area, country/local rules and the property itself. I hope the analogy sounds pleasant. Marriage is actually more complex.

On how to buy a home abroad, you want to ask some critical questions to determine if the person at the other end of the table isn't just telling outright lies; trying to elope with your cash. This is because sadly, there are few or no safeguards in place to protect you. You want to find an answer to these questions:

* Is the property a good fit for me or my investing strategy?

* What are the zoning laws that apply?

* How trustworthy is the seller?

Once you find answers to these questions, you should follow the below steps to simplify your overseas property buying.

HOW TO BUY A HOME ABROAD

This is just a summary of steps you have to take when you want to buy a home abroad. But, it's important to know that making an overseas property investment might not be a systematic process, there would usually be hoops and turns. A crucial advice for new overseas property investors: don't be in haste or as the saying goes, you might have the opportunity to repent at leisure.

1. Browse properties in a good location. You should check properties online that match your criteria. But don't just browse properties online. Go check out the property physically. Although technology makes it easy to show much of a property online, it is not to be compared to physical examination. If you'll be buying property without physically seeing it, get an agent or any neutral person to take as many photos as possible of the property from many angles so you'll be convinced it'll make a good investment

2. Research the market. While researching the market, make sure you find out about the possibility of getting good ROI on your investment. Developers might pressure you to make a deposit on a new property while you are on visit; promising you quick ROI. You should always wait until you have returned home and had a chance to think about it before deciding.

3. Legal checks. Legal checks and processes can be a major cause of headache when buying property abroad. The process of buying property in many countries follows the same pattern as that of Britain. There is a title which states who owns what and there are contracts to be filled, specifying the owner's commitment to sell the property and the buyer's commitment to buy it. However, legal systems and lingo varies throughout the world and the people involved in the process also vary. It is important that you find out these legal nuances and deliberate on your ability to meet them.

4. Financing. How will you fund the purchase of your property? The two most common ways of funding property abroad are mortgages and taking out a HELOC or home equity loan on your current home. Read this article to find out more on financing foreign property investments (3 Ways Top Investors Finance Their Foreign Property Investments).

5. Invest or buy. If you're investing, you need to be more focused on the financials. Buyers of second home, might also consider letting out to holiday tenants. In both cases, the balance between supply and demand needs to be assessed.

Buying a home abroad can be a life transforming experience or a tragic one. Therefore, you need to make rational considerations and not be ignorant.

By Bebuzee Admin Read More
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5 Fears Limiting You from Real Estate Investing

  • 11, May 2023

Just like any investment where speculations are involved, there is risk with real estate investing. Investors who have gotten their fingers bit have fed us the ‘negative stories’ and have helped create many fears. Yes, there are risks, and they can make for a pretty bad fall if you don’t prepare for them. But there are also fears. Here we’ll explore five basic fears stopping you from making that real estate investing decision.

I also hope to expound on these fears to help you see that you can get past them. The best way to overcome fear is embrace it and do that which you fear. So, no matter what we say, the decision to take the plunge still lies in your hands. Will you create long-term prosperity with your real estate investment or let fear hold you back?

1.     Negative Cash Flow.

Cash flow is what remains when the operating expenses, the mortgage costs and other expenses have been deducted. The fear of negative cash flow, mostly fed by investors who have been there and done that, has held many people back. However, it is just about making the right calculations. You don’t expect to be 100% accurate about the possibility of vacancies or how much rental income you could make in a month but you can obtain past rental figures from the previous landlord, estimate possible repair expenses and still get your numbers close a notch.

 

2.     Right Timing.

You’ve always heard ‘you’ve got to time the market’. The problem with that is this: you might never find the right time. If you’re afraid that the market might just not be ripe for real estate investing, I say that’s FEAR. As long as you can comfortably buy a property without putting any strain on your family’s budget and the country in which you’re investing isn’t in a pothole, go right on. The time is right.

 

3.     Chasing the positive cash flows.

Some real estate agents who have tried and fumbled will tell you that you can’t cash flow positively on duplexes, condos, office complexes etc. With discouraging tales of despair, you catch the FEAR. This is actually an opportunity to learn from their mistakes. They failed because they went in with the wrong PLANS. Learn, attend seminars, buy DVDs and EBooks and develop a fail-proof strategy and you’ll get the positive cash flows.

 

4.     The hassles of management.

Chasing renters for each month’s rent and dolling out money on property repairs are all reasons to run far from real estate investing. What if you had a troublesome tenant giving you problems? The hassles could keep you awake at night. You however do not need to go through the stress of managing your property yourself. You can hire professional property managers or management companies to do the job and do it well.

 

5.     Lack of experience.

Yes, you do lack experience. All the seminars and courses do not make up for firsthand experience. So, if you lack the experience, why not work with a realtor who is a local expert and leverage their experience. (Check out the importance of a local realtor).

 

In conclusion, it’s not certain that investing in real estate will make you an overnight millionaire but if you do your homework and work with the right people, you’ll do just fine.

By Bebuzee Admin Read More
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5 signs youre cash flow negative on your vacation rental property

  • 17, October 2023

Spending money consistently on a cash flow negative rental isn't smart. It might be time to change your strategy.

 

Vacation rentals are a great way to make extra income from your property investments. Short term rental provider, HomeAway https://www.homeaway.com/info/getting-started/income reports that the run-of-the-mill vacation rental property owner nets $11,000 a year.

 

But if you consistently have to spend rental profits on roof repairs, vacancies, regular maintenance, bad tenants etc, you probably have a cash flow negative property on your hand. And there are two approaches to dealing with this problem. You can either wait it out and hope things will somehow change or kickstart an exit strategy to move on.

 

While cash flow doesn't have to be a decisive factor, especially when you have a vacation rental property in an up and coming neighborhood with strong potential appreciation rates. Many times, you might be spending more than you bargained for with your rental. And the faster you discover this, the better.

 

This article outlines five signs of negative cash flow vacation rentals but before we proceed let's see a simple formula for measuring cash flow on an investment property:

 

Cash Flow = Total Income (Application fees, Rent, etc.) - Total Expenses (Monthly mortgage (if applicable); General Maintenance, Electricity, HOA, Property Management, vacancies etc.)

 

As a rule of thumb when buying an investment property, it is wise to set aside an emergency fund to cover at least first six months of expenses. So let's dive right in and see some of the signs to watch for.

 

1. High vacancy/Low occupancy rate in a location: What's the occupancy rate for your neighborhood? An important sign of a cash flow negative property is high vacancy rate in the neighborhood. According to Turnkey VR https://blog.turnkeyvr.com/much-money-can-make-vacation-rental/ specializing in the management of turnkey vacation rental homes, "Occupancy rates for vacation rentals can be all over the map. For instance, a vacation rental home in a big city might create more demand than a rental property at a seasonal location like the beach". Location is key when buying real estate, especially for investment. Hence it's wise to spend time researching a neighborhood before taking the plunge.

 

2. High Maintenance property: Are you doling out high monthly fees for property maintenance? Then you might be dealing with a cash flow negative property. A 30-year-old property might offer a great deal but when you have to spend considerable time and money on maintenance and fixes monthly, you have to ask yourself if it's worth it.

 

3. Declining Rental Property Market: How strong is the rental property market? There is a strong correlation between a thriving property market and low vacancy rates. Many times a declining rental market is a sign of underlying economic issues, most times accompanied by high unemployment rates and slow growth. Sticking around in such a neighborhood would be unwise. Unless you're confident about a significant development in the neighborhood in coming years.

 

4. High Property Taxes: Did property taxes go up? Taxes can get tricky, especially when you're buying as a foreigner. However, when sudden tax changes are eating up your income, then you have a negative cash flow property.

 

5. Problem Tenants: Are problem tenants eating up your profits? You have two options, regarding managing your rental property. You can either hire a property management company, which means more expenses but better management. Or you can just ride it solo. While this offers you the chance to take an active role with your property, dealing with problem tenants (tenants who break things, tenants refusing to pay rent or pay promptly, tenants causing disturbance etc.) is a major headache and can eat into your profits.

 

Hence the importance of having a screening process that's hard to bypass. However, if you deal with problem tenants a lot, it might be time to consider setting an exit strategy in motion.

 

You can take advantage of short-term rental cash flow with sites like HomeAway and AirBnb. While tenant turnover rates can be high in the short term, short term rentals can be profitable, especially in a popular destination such as a ski resort or beach community.

By Bebuzee Admin Read More