Investing in real property is considered a milestone. Whether you are just a new investor or a seasoned tycoon, the experience is exhilarating, rewarding, and valuable. With an average of 8 to 12% return on investment in real estate, who would not be enticed?
Aside from owning a property, investing in real estate presents other advantages such as higher returns than the stock market, better protection against inflation, coverage of mortgage payments, a good and stable source of income, tax benefits, and direct control of your investment.
Real property investment, like any investment, is also beset with fraud and scams. If you intend to put your hard-earned money into real estate, it is advisable to discern whether it is legitimate or fraudulent.
So how do you protect yourself from those scammers? Here are the ways:
1. Research about their background
Check their length of service, previous projects, and feedback from the current residents. On the other hand, you could check the developer’s credentials. This includes past and completed projects, citations received, and complaints against them. Searching them in google will be helpful.
Research also about the real and current value of the property so you won’t exceed your budget.
2. Make an actual visit to the site
This is your chance to verify the existence of your prospective property. Aside from verifying the existence of the property, this is also your chance to inspect your future neighborhood. You could also see on hand the road condition. This is the opportunity for you to know whether the electricity and water supply is sufficient. You may also check the proximity of schools, hospitals, wet markets churches, and business centers to your property. You could inspect the drainage system while on site.
3. Do not pay anything or send money
If you have to, then you need a notarized written agreement with the broker or agent that she received the payment and will pay to the developer on your behalf. He or she must issue a copy of the Official Receipt coming from the developer. The developer, admin, or marketing personnel should advise you that they had received your payment.
It is better to pay the reservation fee, monthly equity, or monthly amortization directly to your legitimate land developer to be on the safe side. Keep all receipts secured and intact.
4. Demand for licenses, authorization letters, or permits
Make sure that you are dealing with credible agents and brokers by asking for licenses and permits of the seller, broker, or developer, a portfolio of previous projects, authentic property documents, proof of identifications, and authorization letters. Confirm from the developer if the broker has obtained the license to sell.
5. Verify the authenticity of the property documents by checking the following:
- Serial number
- Paper material
- Dates
- Titles and seal
- Reconstituted tags
- Title number
- Copies
6. Keep your documents closer to your chest.
You must be careful in giving your personal data, personal documentation and account details, and credit card verification code to sources unknown to you.
It is safer to send your loan documents directly to your developer because it is confidential and can be used illegally. You could ask for an acknowledgment receipt, photo, scanned copies of receipts, and forms from the developer’s admin in case you really need to submit your documents. Never transact online if you feel suspicious or uncomfortable.
7. Ask your home insurance provider about title insurance that provides the best protection against this type of fraud
Home insurance is financial protection against home loss, damage, accidents that occur either on the residential unit or inside the house. Townhouses, apartments, condos, and other structures used as dwelling units are qualified for home insurance.
8. Invest in a title insurance policy
Title insurance protects you from title fraud. A title fraud happens when a fraudster steals your identity and fakes your documents to be used to re-enter a mortgage to earn proceeds or sell your home without your knowledge.
Investing in real estate is one of best smartest you could make in your life. It can secure your future as it could be a source of passive income. But before you let go of your hard-earned money, equip yourself with proper and enough information to avoid getting scam. As they say, being forewarned is being forearmed.