Property Investments: What you Should NOT Do
A person invests into real estate with the intention to gain something in return. But investing into real estate has to be a calculated move. There are several factors that need to be taken into consideration while taking a property investment decision.
Specially in India, there has been a considerable boom in the real estate industry. While the numbers soared as high as 120 billion U.S dollars in 2017, it is expected to rise to 1 trillion U.S Dollar by 2030.
An investment catering to healthy financial returns is bound to benefit you. Therefore, I am sure you would want to make a profiting investment. A property investment with good returns is meant to give a boost to your confidence, whereas if that investment goes downhill it can really shake you up financially and mentally.
Keeping the above in mind, there a bunch of things to avoid while investing into property
Research plays a vital role. Gathering information about an estate from different sources helps aligning your acquired knowledge. So that you can tally every point picked up by you to assess the legitimacy of a real estate investment plan.
When I say research, I mean every small detail that you can possibly pick up. Sufficiency in research will help you skip the hurdles of a dead investment. Take into consideration factors such as location, city, upcoming projects, builder’s history, area’s capital appreciation, rental yield etc. Surprising enough, research is always a step skipped. But it stands to be one of the most important things that you need to consider while investing into property.
You Need to Check your Finances
Hasty decisions will lead to downfall. Many investors, or rather inexperienced persons, do not level with their finances beforehand and jump to taking a decision. With investing into properties, come additional costs that you may tend to overlook. Costs such as painting walls, maintenance, furnishing and monthly living expenditure. There are a few more highly essential factors such as taxes, insurance and duties payable. It is better you make a list of all the finances and costs you will have to incur along with purchasing the property.
There are 3 factors so said, that are highly important to consider while investing into property. Therefore, the next mentioned factors are so, they are different from the mainstream factors and play a significant role in investment decision making.
3 Factors That Essentially need to be Considered while Investing into Real Estate
Can I handle the Failing of this Investment?
The reality of property investment is way more different than you imagine it to be. You may believe that your property investments are to give you a continued flow of income. But there can be months without any income from the property due lack of renters.
What I mean is, in case this investment doesn’t go as you expected it to go, will you be able to cover for the losses incurred? This is an extremely important factor that needs to be considered before investing into any property. You need to be capable enough to pay for insurance, taxes, mortgages, duties even when your real estate investment is not bringing you in any income.
Appreciation is something an investor definitely looks forward to. Make sure the area’s property you invest into has a good appreciation rate. The locality, the neighbourhood all play a role in it. Since your agent may be the only source of information on this, it is better you do some personal research in this matter.
The return that you expect from your investment will tell you if an estate’s worth investing into. Since you will be handling a lot of costs too while investing in the property therefore good mortgage and rental rates are something you need to take into consideration. Consult with your real estate and mortgage broker well. Make sure that they are trustworthy people.
Since there are several properties, from homes, villas to commercial and industrial places it is important you look out for maximized returns. And this depends on choosing the right property too.
When I say real estate Property I don’t necessarily mean residential homes, buildings, villas, etc. Real estate has types. The more you are aware of the better you can understand where and how to Invest. Therefore, below will be listed all the forms of real estates.
Land as in vacant piece of land that requires developers to start a project on it and increase its value. Land is the most basic of all forms of properties.
Residentials consist of homes owned by families or groups of people. It is the most recognised form of real estate. It also has more recognised asset value compared to any other real estate property. Residential is again divided into several types such as condos, single-family homes, townhouses, apartments etc.
Properties that are used up by business owners to carry on their business activities. Such as shopping malls, departmental stores, office buildings, parking lots. Essentially any space being occupied with the intention of running a business.
In the simplest form and as the name suggests, estate properties where industries are set up, for example warehousing, manufacturing, research and development etc.
This article has attempted at being as informative as possible. In its all efforts, it has tried to achieve the simplest form of writing skipping any form of complexity. So that its readers can not only enjoy the article but get a crystal clear understanding of the information they are trying to attain.