Planning to purchase and invest in property? There are many significant reasons to think that it is a sound investment plan, however, it is better to consider the risks and rewards of owning an investment property. Here are the things you should know before committing your finances to the undertaking if you no prior real estate experience.
Know the ways to profit from real estate investment-When it comes to selecting a property, cash flow is an important factor. The amount of profit you'll earn from fixing up investment properties and selling them. Also, consider your annual income against the properties' inherent decreasing values to find out how much needs to be paid as taxes. Setting specific investment goals becomes your action plan before deciding to plan property purchase -research and plan.
Investment Purpose and Horizon- A lack of clarity on the purpose of an investment may not offer you the expected results, including financial gains—especially if the investment is mortgaged. So, it is better to identify the purpose and then plan the search accordingly. Find out if you are buying the property for self-use, lease, buy, and sell for the short term. If you’re buying for yourself, you can save on rent and while also getting value appreciation, if you’re planning for regular income and long-term value appreciation, buy and lease is the best option. Those who are looking for quick, small to medium profits can consider a buying and selling plan.
Checking (RERA) registration of the housing project- Introduced in 2016 to protect the interests of the home buyers, RERA protects and safeguards the interests of the home buyers. So before investing in any property, check and verify the RERA number and approvals online or from Municipal authorities to establish the authenticity of the project. However, you should also consider the market prices of the other ready-to-move-in or under-construction projects apart from the developer’s brand value. This helps in evaluating the future price of the property.
Choosing the right location that aligns with your investment goal- Nobody would like to be stuck with a property in an area that is not showing any signs of price appreciation. It would be a nightmare to see the price declining rather than being stable or picking up steam. Hence, look for a location where the population is growing and a revitalization plan is underway. The locale with plenty of amenities, such as parks, malls, and restaurants, access to public transportation, and a growing job market will have the potential investment opportunity.
Look for Mortgage options that serve your requirement- First-time home buyers will find many attractive housing loan incentives offered by the government. In addition, there are excellent tax benefits on the home loan interest rate under Section 24 and principal payment. So, it is necessary to understand the types of mortgages available and their benefits. Mortgages that offer favorable interest rates and adjustable-rate, each should be weighed carefully.
Overall, we can say that real estate can be profitable when you have the in-depth knowledge to make wise investments. The investment has the potential to grow in value over time and can also be utilized to earn regular income.
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