Are you afraid of investing in real estate? Do you want some guidance about useful ways for real estate investment? Is this the right time to invest in real estate? Kindly read further to get your real estate investment queries answered. Here, I have listed some important points to be considered before making real estate investment.
Why should we invest in real estate?
With the General Elections 2014 coming up, market seems upbeat with investment opportunities growing in various sectors including real estate. In the later part of this year, once the elections are over, the market sentiments are expected to improve. Quite often many of us having sufficient amount to invest do not think beyond Mutual Funds, equities, PPF, NSC, NCD, gold and silver. It is important that we realize the potential of real estate market. The returns one can get from real estate investments are significantly higher than investing in any other areas. But, more often than not most of us hesitate to invest in real estate because of the huge amount involved. For a common man, it is a dream to have his own big house where he can stay happily with his family. With the increasing salaries for the working class, new booming businesses and home loan rate cuts offered by banks, this dream of owning a home is getting fulfilled for many people. But, they often stop thinking about real estate after purchasing their own home and continue paying the EMI for their home for the rest of their lives due to lack of other high return investment opportunities. The only way anyone can quickly repay home loan is by investing more in real estate.
Real estate investment is considered to be a high risk investment. But, the truth is if we gather good information about real estate and follow some basic rules of investment, we can easily make good profits from real estate investment. In this article, I have listed some useful points to remember before making real estate investments. It will make most of us feel confident about taking an informed decision about investing in real estate in future.
Who should invest in real estate?
Not everyone can invest in real estate due to the huge capital required. I have tried to list some of the deciding factors for real estate investment below:
You should have your own big house where you can live happily with your family for a lifetime or atleast for next 20 years. No other purchases will ever be as expensive as your flat purchase. So, if your own home will give you a lifetime security and you can try some more investment in real estate.
Atleast 2 or more people are earning more than average monthly income in your family. If one of them is carrying the burden of house loan, it is important to make a timely decision about another small real estate investment that will help you to pay off the loan much before the actual duration is over. This will help you to save lot of unnecessary interest that you will pay on the housing loan and you will also earn significant profits through your second real estate investment.
You should decide to invest in real estate only after ensuring that your family needs and your goals won't have to be compromised because of that. A proper analysis of the costs involved along with smart financial decisions will help you to invest wisely in real estate over a certain period of time.
If someone in your family desires to start a business or firm in couple of years, it is the right time to invest in an under-construction small gala (shop space) or office space. Not only will it fetch you good appreciation of the space you purchase, but, it will also enable your family member to start a business in a place that was purchased for low costs in the past.
Useful tips for real estate investment
For any first time real estate investor, it is advisable to invest in real estate from reputed builders or developers. Real estate market is considered risky because many unknown developers may not be able to complete the project on time, thereby, keeping your investment at risk. So, always look out for a reputed builder who has successfully completed few residential or commercial projects.
One can look out for investment in a residential property or commercial property. People who do not plan to use the real estate space immediately can make investment in an under-construction property as it is bound to fetch good returns over a certain period of time.
Before making an investment, do some extensive research and compare existing real estate prices in market in different parts of your city or town or village.
Try to look for localities that have some residential buildings and commercial offices. This will help you to know about water supply and electric supply in that area.
If you are choosing a residential property for investment, try to look for an area which has easy access to grocery stores, hospitals, parks, shopping market, theatres, restaurants, schools, etc. This will be an important criteria that could fetch you a handsome price while selling your property to someone who will be using it for stay purpose.
Look out for projects that are funded by FDI.
Make sure you invest in a property that is easily accessible by you as you may have to commute few times to that place for completing formalities as well as for occasional supervision. Alternatively, opt for investment in an area where any of your close friends or relatives is living. This will help you to avoid unnecessary long distance commuting for small matters.
If you invest in an under-construction property, try to visit the construction site to check progress.
If you are investing in commercial property, ensure there are good public transport facilities available nearby. Also, ensure it is within a renowned business district or area.
If you do not intend to put the property on rent upon possession, then, you can plan to sell it off immediately after possession.
Ensure that you start advertising about the property you are planning to sell atleast 8-9 months before your planned date of selling. Properties take time to sell and it is important that you start advertising at the right time. Do not leave any stone unturned while announcing to the world that your property is on sale. Put advertisements online, use Facebook and other social networking sites, propagate on whatsapp, approach some agents (to know the best possible price you can get), put advertisements in your office notice board, inform your building people and nearby friends, etc. This will help you to get the best price for your property.
Once you sell your property, use the amount to lead a loan-free life (by repaying any previous loans) and then invest any remaining amount in debt instruments as this is a good way of protecting your capital gains.
Read a lot about capital gains tax and adopt methods to save tax if you plan to keep the property for a long period of time.
If you want to keep earning high passive income for your entire life, make sure you book another property using the principal amount gained from the sale of the first one. Some portion of the profits you made from the sale of first property can be used for investing in diverse instruments or for your child education and other portion can be used for buying gifts for your family and a nice family outing.It is very important to celebrate with the profits earned from real estate as it takes a lot of good planning to strike a nice deal.
Hope the above tips for real estate investment will prove beneficial to you. If one simply follows these points before making a real estate investment, the risk involved in real estate can be reduced to a great extent. It is important to never delay making an investment when we have enough funds. If you go check Indian real estate history, there was never a time when buying a house in cities was easy. It is completely up to us how we utilize the available funds, housing loan facilities, etc. to make some smart real estate investment decisions at the right time. Please share your suggestions and experiences related to real estate investment. I am sure one thing we all will agree is that no investment can give returns as high as real estate investment gives.
It is a highly educative article that brings to the fore the best residential areas in Chennai with clear information on rental rates, connectivity, education, and lifestyle benefit to its users, thus it comes in handy among the families and working people planning to move in. The discourse on such places as Anna Nagar, Adyar, T. Nagar and Velachery, is effective in providing how an infrastructure development is leading to a demand of real estate. It would also add flavor to the article by briefly listing the Reputed Township Developers like Accord Housing who are actively involved in well-planned residential living, recent facts about the metro connectivity, improved flood management and the current buying habits of the populace in the ever-growing real estate sector in Chennai so as to enable the readers to decide on such a venture in a better way, both in terms of renting and long-term investment in the Chennai real estate development.
It is a highly educative article that brings to the fore the best residential areas in Chennai with clear information on rental rates, connectivity, education, and lifestyle benefit to its users, thus it comes in handy among the families and working people planning to move in. The discourse on such places as Anna Nagar, Adyar, T. Nagar and Velachery, is effective in providing how an infrastructure development is leading to a demand of real estate. It would also add flavor to the article by briefly listing the Reputed Township Developers like Accord Housing who are actively involved in well-planned residential living, recent facts about the metro connectivity, improved flood management and the current buying habits of the populace in the ever-growing real estate sector in Chennai so as to enable the readers to decide on such a venture in a better way, both in terms of renting and long-term investment in the Chennai real estate development.