Buying Malibu property has historically been a wonderful investment and can make living in a terrific location a sound financial decision. For those that are not prudent, however, buying real estate without taking proper precautions can be risky business. Those risks are even more serious if you don’t do your research, and make uninformed decisions. Whether you’re buying to have a place to live, or you’re choosing an investment property, here are four costly mistakes to avoid specific to the Malibu market.
Lack of Due Diligence
Diving in and buying Malibu property without taking into consideration the market — long-term and short — as well as the condition of a property, the actual value, or, if it’s land, if can it actually be developed, can be extremely expensive mistakes to make. Always be sure to investigate properties thoroughly, with home inspections, termite, and septic inspections. If any reports come up in the home inspection that recommend further research by specialized professionals definitely do so.
Believing Malibu property values can only go up
Thanks to the housing bubble burst not long ago, most people have realized that real estate isn’t always the best investment—depending on the economy and many other factors. It’s an extremely large purchase for most people, and one that you can’t easily get out of if you decide the house or the neighborhood just aren’t right for you.
Before you choose a Malibu property, be sure it’s the right home for your and your family, or understand the risk you’re taking if you’re buying Malibu property as an investment. Be sure to consider what your exit-strategy is…Are you going to lease? What are the carrying costs? What is the cost to remodel…etc.
Not Considering All Costs
The price of Malibu property is not the only cost to consider when calculating investment outcomes.
Additionally, there are taxes, insurance premiums and other expenses that you’ll have to pay. Whether you’re investing in the property to use it as a rental or flip and resell it, or it’s a home you want to live in for a long time, every cost matters.Not having expert real estate investment advice and help can be your costliest mistake. Click To Tweet
Property characteristics that should be considered
Location: What makes the location desirable? What are the recent sales in the area? How does your property compare?
Sewer or septic: What is the condition of the septic system? Does the property have an operating permit as required by the Malibu point of sale ordinance 321? Is the property located within the civic center septic area?
Recent law requires commercial and residential properties in central and west Malibu, as well as other areas to hook into a central sewage treatment center. While residents may not have to pay to hook into the system, commercial property owners do.
Access: Can the property be accessed easily via existing roads, or will you have to pay to build one? Can one even be built? Be sure to get your easements plotted from your title company.
Cranky Neighbors and Government: Malibu is fraught with stories of neighbors pitted against neighbors, or residents against the city or state when it comes to viewsheds, public access trails, and getting building permits. Be sure to research the neighborhood where you plan to buy Malibu property, to avoid any expensive problems that could crop up.
Not having expert real estate investment advice and help, can be your costliest mistake. Unless you have deep knowledge and experience in buying Malibu real estate, it’s best to have a team in place. Your team should include an expert Malibu real estate agent, a knowledgeable home inspector, and a reputable insurance agent. Your team will help alert you to any potential problems with the building or property.
Investing in Malibu property can be a successful venture, if you take the time to find the right property, do your research on costs and the market, and consider all factors that could affect your investment. But if you take the right steps, and make informed decisions, your Malibu property purchase can be one of the most profitable investments you make.