Sergio Gutiérrez, a real estate expert, details in a video the four factors he checks before buying a property and the mistakes that reduce profitability, such as ignoring taxes, fees, or the legal status of the property.
The real estate expert Sergio Gutiérrez has warned of the risks of investing in a property without first analysing a series of factors. In a video published on his TikTok account, as reported by cronista.com, Gutiérrez explained what he checks before buying a property and why it is crucial to evaluate both the price and the associated costs of the transaction.
"Never invest in a property without checking this,” warned the specialist, who listed four aspects he considers fundamental before allocating money to a property.
The first is the value of the property: analysing how much its price could drop during a crisis, if there is room for appreciation, and whether its cost is attractive compared to the market.
The second is the actual numbers of the investment. Gutiérrez recommends calculating the purchase price, rental income, community fees, property tax, special assessments, taxes, and transaction costs. He emphasises the importance of knowing the net profitability, rather than just the gross.
The third factor is the legal status: checking if there are any liens, legal proceedings, occupants, or existing contracts that may affect the transaction.
And the fourth, the rental situation. If the property is already rented, it is necessary to check that payments are up to date, the age of the contract, and the agreed conditions.
Gutiérrez also warned of several mistakes that can affect the economic results of a purchase. Among them, relying on promised profitability without verifying the data and acquiring properties in conflict zones or with low rental demand.
Another mistake is failing to calculate taxes or check the regulations applicable to rentals, factors that can alter the expected income and the expenses the owner will have to bear.
The specialist also alerted about the risk of buying a property to renovate without calculating how long the work will take. During that period, the investor may go months without receiving rent while still facing the associated costs of the property.
Before closing a transaction, Gutiérrez stressed the importance of including all costs in the calculations to determine if the investment is profitable, and noted that high commissions can significantly reduce profits. As he warned, these payments can consume the profitability of the first year.
Therefore, his recommendation is not to make a decision based solely on the price of the property or an estimate of rental income. Reviewing the documentation, verifying the figures, and calculating the expenses before buying allows for a better assessment of the risks and the real profitability of the transaction.
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