If one wishes to invest in a piece of property, one needs to keep in mind various factors as a wrong decision could cost the investor dearly
The real estate sector in India contributes largely to the Indian economy and its GDP. Recently, it has witnessed transformation due to policy changes, lack of funding and various other factors. If one wishes to invest in a piece of property, one needs to keep in mind various factors as a wrong decision could cost the investor dearly.
1. Background check before investing
A proper background check on the property is very important before investing. The background check should include the location of the property, about the builder and whether the property fulfills the entire legal criterion. Other factors which should be checked upon include delivery time and costing. Once you are done with all these things, then only think of investing in a piece of property.
2. Calculate expenses and profits
Making any investment in property is always critical and calls for careful analysis of expenses and profits beforehand. If you are a beginner, start with calculating the money that you already have and what you can borrow. Once done, calculate the total cost. Also, keep in mind the operation cost.
3. Invest in a low-cost property
As a beginner, never go for an expensive property deal, as they have hidden costs and intricacies that might trouble you in the long run. It is always a good idea to go for properties that lie in the lower to mid-range price brackets. According to experts, the reason behind going for such bracket is to manage the future cost of renovation/redevelopment of the property before renting or selling it.
4. Review investment loan plans
When it comes to investing in real estate, flushing out the liquid cash is not a wise option. It is suggested to go for a loan. Having said that, you should never settle for any random loan plan. Always look for options and review each one. Today, there are a large number of options available when it comes to collecting funds to purchase your first property. Choose the right option that could make a positive difference to your financial situation. During the process make sure to know which loan option is giving you the freedom to split the credit or if it provides you with the line-of-credit facility.
5. Choose people carefully
When it comes to real estate, people often plan to go for partnerships to deal with the financial stress, but first-time investors need to carefully consider many factors while choosing their partners. From legal advice to profile verification, it calls for many things-to-do before getting into a partnership agreement. According to experts, legal implications are more important than anything else to avoid future chaos.
6. Be ready with down payment
A real estate deal involves a bit of down payment and the rest can be managed through a loan. So, before you plan to buy a property, have a rough idea about the price range you are ready to pay and then be prepared with the down payment that is likely to be 10 per cent of the final cost.
7. Pay your debts
This is something that people often neglect, but, according to experts, its important to review the status of your debt before investing in a new property (especially when you are a newcomer). It is important that one shouldn’t be carrying debts as their investment portfolio. It is necessary to clear all of your debts, student loans, medical bills, etc., before starting stepping into real estate.
8. Control your emotions
For many, investment in real estate has an emotional connect. So, if you belong to the category, learn to control your emotions and learn to be a little practical and logical. Think of it as purely a business investment and logically negotiate to get the best possible price. Remember, the lower the price you get for a property, the better are the odds that you will earn a higher profit from it.
(By Vishu Goel, Founder,Infinity Spaces)