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Every investor yearns that his investments should appreciate exponentially, but it sounds weird in the present fluctuating market conditions, especially after the pandemic. However, it is realizable even in the current scenario if you focus on the right real estate strategies.
Find the five most important factors to multiply your investments:
Research to find the right property
It is very significant to do detailed research on various aspects of real estate before you dive into property investment to earn good returns. The market research will enable you to narrow down the factors like type, amenities, size, locations, etc. A locale where various new latest developments underway indicate the potential investment opportunity.
Invest in rental property
Rental property generates consistent monthly income along with the appreciation of the property itself. You have to do the due diligence to pick the right commercial or residential property to generate excellent income.
Investment in rental property can be rewarding you select the right property in the strategic location. The surrounding and location of the property will determine the type of tenants, such as if you buy residential property near the university, it is most likely that the students can be your potential tenants, you may struggle to earn rents during summer.
Research the average commercial and residential rent in the surroundings to understand the return on your investment or the financial feasibility for you.
It is very significant to figure out potential threats and opportunities in the rental property, Whether it is residential or commercial, to earn an optimum return from your investments.
It increases the rate of return and, in turn, doubles your investment at the earliest. You receive high returns but incur the costs proportionately. As a piece of advice, you must estimate the renovation costs before jumping to buy rundown properties.
Renovate and sale
A rundown property can also generate a handsome return in the short run. You have to renovate and fix the property as per the latest trends and requirements before selling. You can double your investment in a short time, at the same time, it is significant to assess the locality, potential supply, estimated refurbishment cost before purchasing the rundown property.
Calculation of your yields
Ensure you have done good research and understand how to calculate yields. For example, a low borrowing rate accompanied by high-yielding locations means an excellent return on your investment. If you are buying property by self-funding, make sure you are getting a return better than any other asset.
Know the latest real estate market trends
Analysis of real estate market trends is the key to earn an attractive return on your investments. A calculated and informed investor can easily earn returns. Hence it is most important to study the real estate market trends before plunging into the purchase process.
If market conditions suggest, the price may come down, wait and watch till the market bottomed out. However, you can’t purchase from the lowest but can buy at the best minimum price. If you can crack the deal during the falling phase, that can yield a substantial return in the short period as the market recovers.
If you follow such strategies, doubling the investment appears possible and lucrative. But at the same time, it is essential to calculate the time required for doubling your investment.
SMART TIPS TO MAKE THE MOST OF YOUR INVESTMENT IN REAL ESTATE
Use best practices and smart tips in buying property and emerge as a winner with a smile on your face and cash still in your bank account.
1. SELECT THE RIGHT REAL ESTATE AGENT
It is extremely essential to research and select the right real estate agent which can make all the difference when it comes to finding either your dream home or office space/shop for your business and negotiating the best price.
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2. SEARCH SOCIAL MEDIA
Social media is a great resource searching property just sitting at your home. It helps you to analyze the reviews of other buyers and various properties in the same location.
3. RESEARCH GOVT. SCHEMES
Govt. is offering many schemes to support first-time homebuyers such as Credit Linked Subsidy Scheme under the Pradhan Mantri Awas Yojana (PMAY). Under it, the central government offers interest subsidies on home loans. It is important to research all such schemes and take advantage of them.
4. SELECTION OF RESIDENTIAL PROPERTY
Buying a house just based on your emotions is not right. If you fall in love with paint, color, etc., and make the decision on that basis is not right rather try to recognize that you are buying the house based on your requirement for a good value. Therefore, it is very important to stay calm and wise while making any decision. Buying ready-to-move-in property is better than under-construction property in the current market environment but in the case of the reputed builder, there is no harm in purchasing premium property at an extremely attractive price.
5. SELECTION OF COMMERCIAL PROPERTY
There are many options of commercial property in the market such as studio apartments, lockable and non-lockable office space, and retail shops. Before buying any property, ponder over your purpose, if you are just an investor select non-lockable space because non-lockable space is available in the market with 10%-12% assured return post possession. If you are an end-user but require that space after sometimes such as after retirement, then buy lockable space with assured return till possession. If you want to do your business immediately, go for ready to move in option.
6. GO THROUGH ALL SPECIFICATIONS, VASTU COMPLIANCE, AND AREA
While buying a house several terms like super area, built-up area, and carpet area mentioned by the developer cause confusion. They may not appear very different but there is a big difference between the carpet area and the super area. So it is very important to understand these terms before buying. Apart from that go through all the specifications of that property as it creates a big difference in costing the property. Vastu compliance is also very significant for positivity and growth, therefore always check the layout while buying commercial as well as residential property.
7. SELECTION OF RIGHT LOCATION
Neighbourhood also has a great significance if you are buying a property, if you are buying an apartment, do research nearby schools, hospitals, pharmacy, means of transport grocery stores, etc. Do look into the crime statistics of that area.
If you are buying any commercial property research the buying capacity of the people in that area, the demand for your product in that location, etc.
8. GO THROUGH ALL COSTS BEFORE INITIATING HOME BUYING PROCESS
Most of the buyers concentrate on basic costs but there are many out-of-pocket expenses and plenty of other fees required for a property purchase that you should be aware of before initiating the process. You should also calculate your closing cost and this will help you to set your budget. Closing cost in case of resale property includes registration charges and some other govt. charges and real estate agent’s commission while in case of fresh property from builder closing cost includes various charges like transfer charges, possession charges, registration charges, etc. If you know these charges you can negotiate with your buyer or developer before finalizing the deal.
9. Consolidation of funds
Figure out how much money can be arranged for the down payment and try to assess the eligibility for a loan. A bigger down payment means lessor EMI which means less stress on your monthly budget. If you are going for a home loan, you can have tax benefits on your loan that will also help you to manage your funds.
10. Pre-approve your home loan
Getting your loan pre-approved means a financial institution has looked at your all financial information that gives an idea of how much they can lend you. It means you understand your loan affordability. Having a pre-approved home loan means saving a lot of time and energy, as you will look for property within your budget and you can have the best deal in terms of interest. There are generally two types of interest rate loans.
Fixed interest rate loan which can give you stability.
A floating interest rate loan gives you the ability to adjust with a prevailing interest rate which means when interest rates are going down, it will be beneficial to you but when the rate is increasing you have to pay a higher monthly installment.
But at the same time, keep in mind pre-approved loan is valid for 6-8 months so you have to finalize the property within that period
Guidance and tips to buy a commercial and residential property in India will assist you to buy the right property to create value for your investment. Right tips can help the buyer to get the maximum return on their investment. In today’s market buyers have to do a lot of research to find the bargains in the market because the market is flooding with inventories. Such a scenario makes it a buyer’s market but at the same time it is difficult to pick the best bargain. Do follow the tips and use best practices in buying property and emerge as a winner with a smile on your face and best property ownership.
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