27 Jan
- SUBHENDU
Important factors to consider while investing in real estate
Investing in real estate is perhaps one of the most popular investments, but it’s not a simple task as it is made out in brochures and advertisements. In fact, investing in real estate is a process where you purchase, own, and manage a property with the motive to earn profit. Therefore, it requires spending hours doing research and considering all the factors before investing your hard-earned money either in land or in a building. Moreover, the entire process is time-consuming, and therefore, one must ensure that they take all factors affecting real estate investment before making a decision. Here, we have listed a few points that you must keep in mind before investing in real estate.
The question regarding what type of property do you want to invest in is perhaps the most important point to consider before investing in real estate. Usually, there are four categories of real estate property: residential, industrial, retail, and commercial real estate. Out of these, residential real estate is the most traditional form of real estate investment, because shelter is something that all human beings require. Those who invest in this form of real estate are doing so on the premise that they always find tenants to rent out their property. The other types of investment, i.e commercial, retail and industrial properties offer a more significant profit margin. In the last few years, we have witnessed a huge upsurge in demand for commercial properties in India, making it a good investment option.
This is perhaps the other most important thing to consider before investing in real estate. Whether it is a house, apartment, land, or commercial space that you wish to purchase, choosing a location that is accessible or will appreciate in the future is one of the most important factors affecting real estate investment. Given that the rate of a particular property depends upon the location and therefore, one must consider all the location options before choosing a property. For example, people looking to invest in real estate in Noida area are now advised to invest in the Jewar area given the proposal to develop an airport in that location, which will guarantee price appreciation of real estate in the future.
Given the fact that investment in real estate demands a financial commitment, where you need to invest more money than you will get in returns, it's important to be clear on the finances. Real estate investment is a capital-intensive process, where you need to have substantial funds to maintain the property before you finally make a sale and also, profit. Given these factors, you need to check the cash available to you before getting into real estate investment.
The market condition keeps changing with the times and the same goes for the real estate market too. For example, when the property prices are high, it is a good time to sell your property. However, in times when the property prices are low, it is a good time to buy and a bad one to sell. Therefore, before investing, one should spend a good time researching the prevailing market conditions. During the last one year, with the coronavirus making an entry into our lives, there was a big blow to the real estate market across the world. At this time, people realized that owning a home gives a sense of ownership and respite in times of crisis, as compared to what had become the millennial mindset before the pandemic struck.
Given the fact that purchasing real estate is a huge commitment, involving a considerable amount of money, do remember to conduct thorough research before investing in real estate.