Why buying investment property off the Internet is a seriously bad idea

 .  .  . and working with YDL Property Investment isn’t

 Article 2 in the series of ‘The dangers of property investment offshore’

Many, if not all, would-be property investors trawl through the Internet looking for the ‘deal of a lifetime’.  When they come across one that looks attractive, they leap before they carefully do their homework, mostly thanks to the fear that someone else will snap up the opportunity. This haste and ‘scarcity mentality’ results in investors committing the deadly sin of not doing their research and failing to understand local market conditions.

YDL Property Investment is often approached by investors who have purchased investment property off the Internet and been burnt.  That’s because there are websites galore that show properties that look really good, but what they don’t show is where these properties are located and what is next door.

The interior of the house in Detroit, purchased off the Internet, showing the extent of the damage

The interior of the house in Detroit, purchased off the Internet, showing the extent of the damage

For example, YDL came across an investor who bought a property in Detroit based on a pretty Internet picture. This investor has completely lost his investment. Detroit’s property prices had plummeted due to the slump in the automotive industry.  Investors were enticed into investing due to the low prices of foreclosed properties, yields of more than 20%, and promises of a rebound.

Like any city, Detroit has its better and worse areas. Based on lovely pictures of cute-looking houses, investors moved into Detroit in droves. Some were lucky and ended up in areas that have held their own and are currently on the rebound. Many, however, invested in areas that were never going to rebound – commonly referred to as “war zones” by local agents. This investor in our story paid $30,000 for a house that was bought for just over $1000 at auction. After being told that it had been renovated and tenanted, he waited for his rental income, which never arrived. And, the letting agency disappeared.

When YDL Property Investment looked at Detroit as a possible investment destination, we offered to inspect the house for the investor. What we found was a house that had been completely vandalised and had severe water-damage. We determined that the cost of rehabilitating the house would be too high and not commercially viable. The house will probably join the list of bulldozed properties.

The interior of the Detroit property, where the extent of the vandalism becomes clear

The interior of the Detroit property, where the extent of the vandalism becomes clear

As an investor, unless you have viewed the property that you are purchasing and have done the research that we covered in our first article in this series (which you can read here if you missed it), we recommend that deals that look ‘too good to be true’ almost certainly are.

The South African YDL Property Investment team travels to its existing and potential investment destinations numerous times a year. During these trips, the YDL Property Investment Executives work with their US counterparts to identify high-growth areas and get updates on local trends. This ensures that clients of YDL Property Investment purchase in areas with the best opportunity for a good return on investment.

So, if you would like to invest in the United States, instead of purchasing property over the Internet, where you have a likelihood of losing your investment, choose YDL Property Investment.  They’ll give you expert local advice on every aspect of your investment and will help you to invest in legitimate, quality properties.  Click here if you’re ready for a personal consultation.