Investing in Real Estate can prove to be quite rewarding as it offers substantial cash flow, profitability, tax advantages, and diversification benefits. Those who wish to start their investment journey can begin by investing in a primary home, which will offer a gradual appreciation & also boost the net worth over time.
Even with limited money, one can invest in the Real Estate sector with the help of various home loan schemes and other authorized financial options available in the market, offering down payments as low as 0-3%. Later, when you wish to upsize or move out into new premises, you can either sell it off at an appreciated value or enjoy a passive rental income on it for a lifetime.
With the Real Estate industry springing back to life in 2022, investments in this sector can be high on rewards for future returns.
Here’s the investing guide for people who want to try their hands in the booming real estate sector. Some of the most important aspects that they need to assess and analyze before plunging into property investments are:
- The purpose of investment
- Real Estate forecast for the properties shortlisted.
- Financial budget, including loan options
- Checking on trusted developers and their projects to invest in
- Checking on all the documentation processes closely
- Making the final investment
Property Investment for Beginners:
As a novice in the Real Estate world, you need to understand many things before going ahead and making the final investment. Let us take them up one-by-one and understand them in detail.
Need for a Plan [Why you want to invest]:
Before buying a house, you need to do pre-planning and give thought to your requirements. The first and foremost thing is to understand why you want to invest in Real Estate, whether it is an allocation of excess funds to raise extra income, or it’s an investment for a home the value of which would increase in the future.
Again, when understanding Real Estate for beginners, it is important to rule out whether you are going to capitalize on the investment through house flipping, or put your funds in residential or commercial properties, or simply want to invest in Real Estate without having the hassles to maintain and manage a property by investing in REITs.
In a nutshell, you need to analyze whether you want to:
- Buy and self-use
- Buy and lease
- Buy and sell for short term
- Buy and sell for long term
Check the Real Estate Forecast:
Before investing in a property, you need to understand and analyze what profitability it can give you in the future. For this, you need to consider the following points:
- How much rental income can it fetch you, keeping in account the inflation rate?
- What is the long-term price appreciation expected to be for the given property and how much would its intrinsic value increase?
- The tax benefits and the depreciation benefits that you would receive on it
- Analysis of cost benefit of renovation before selling or of mortgaged loans as against its appreciated value.
Financial Budget [Loan]:
Another very important aspect to keep in mind before deciding to invest in a property is your financial budget. Calculating your finances properly would give you a clearer picture in ascertaining how much loan you would require.
Once you have these figures handy, you will be able to calculate the amount of interest that you would have to bear over a specified period. All this would have to be worked out keeping in mind how much cash inflow you have, how well placed your financial standing is and how you must plan further to keep these crucial factors well managed.
Looking out for Real Estate Investments/ Trusted Developers:
Property investment for beginners can be quite a risky affair and they might fall prey to scrupulous and fraud builders and developers. Hence, it is important you research and do your homework well before shortlisting the property you want to invest in. Go deep into knowing details about the builders and developers of the project, what is their creditworthiness, how old and reputed is the company, what is their standing in the market and so on.
Knowing about these things would give you a close idea about how reliable and trustworthy your investment is. Many builders even give interest on the initial deposits if the project is not completed on time, all these things need to be taken into account before you plunge into the Real Estate forum as a first-time investor.
Documentation [Read all papers before making the final call] :
One of the most important factors to consider when investing in a property is going through each and every detail of its papers. It is a very common practice to get scammed into buying a property with fraudulent papers, and this remains true especially for those entering the Real Estate industry for the first time.
You might land into long-drawn court cases and litigations if you buy a property without clear titles. This eventually would nullify the investment. Hence make sure you get all your property papers checked by legal experts to authenticate them. If you fail to do this, you might end up purchasing a property which could be mired in controversy.
The Final Investment:
As a thumb rule for Real Estate investing for beginners, negotiate well before you close the deal. Remember, everyone wants a deal that makes them richer, so negotiate and bargain for freebies like parking space, furniture, electronic gadgets and so on before you make the final investment.
Real Estate investment can be a dynamic move towards better returns and a secure future provided you do your research well, study your finances closely, take note of the important factors like the prevailing market rates, and other important factors before hurrying your way to close your first property deal.
Also, investing in projects that promise you great ROI in near future is something you should not miss. If you wish to invest in real estate market for impressive returns, consider projects by Runwal Group as your go to option. Established in 1978, this reputed developer holds an excellent track record of about 65+ successful projects with the trust of 30,000+ happy families.