10 pointers to keep in mind when investing in real estate

The demand for real estate has been escalating worldwide. The extent of investments in this sector has increased by leaps and bounds in the last fifty odd years. Everybody yearns to own their personal piece of land. Most enthusiastic in this regard are the high income youngsters, who are in constant search for lucrative property options in different parts of the world. What they want is not a house, but a home.

Finding the right piece of property to call your own is not a simple task. The real estate market provides a wide range of opportunities to make profits. However, purchasing, acquiring, and maintenance of a piece of real estate is a lot more difficult to do as opposed to buying stocks and shares. It is important to make smart and well researched decisions in this regard. Here are some basic tips that one must keep in mind when planning to invest in real estate:

1. Haste makes waste. Invest carefully.

Never make hasty decisions when investing. Always be in control of your financial bearings. Some people find it comfortable to invest in a safe deal which yields passive returns. Others can take charge of the situation and decide where their money goes and how quickly it grows by doing a little extra hard work.

2. A thorough research is a strategic mandate.

Researching about new real estate projects in the area of your choice never hurts. One can employ the help of search engines and locate properties which best suit their budget and choice. Another way to keep yourself updated is by joining a real estate club. The trend to do so is fast gaining popularity. Clubs such as these are great places to interact with other lenders, investors, buyers, and end users. Here you can get plenty of information about residential as well as commercial properties. One can even join an online investment forum which provides information about the leading real estate investment groups.

3. “Invest” in a good real estate investment group.

Real estate investment groups (or builders) have the ability to provide relevant and factual information about rental properties. They are a source of great help when putting up properties for rent. Such groups or builders construct a range of buildings in the form of independent homes or, as the current trend is, high rises. The units are then purchased by investors (one or several), which makes them a part of the group. While possession of a unit lies with the investor, its maintenance and upkeep is managed by the investment group, in lieu of a basic charge, hence making life simpler.

4. Contact established brokers and dealers.

Be on your guard when locating dealers and brokers in your area. Not all of them are experienced enough to help out investors, especially first timers. Post-recession period has witnessed the emergence of a large number of realtors who claim to have utmost experience in the field of property and foreclosures. Make sure you find a dealer who is well versed with the concepts of real estate like net operating income (NOI), debts, and return on investment (ROI) policies.

Brokers and dealers

Be careful when dealing money with brokers and realtors.

 

5. Trust a good bank.

Having an account in a successful bank which provides good interest rates is a plus. Information regarding what bank to choose can be easily acquired through a broker or through an individual who has recently invested in real estate. Contacting the investment groups can help as well.

6. Read up before taking the plunge.

Reading and gaining maximum knowledge about real estate terms and terminologies can help make technical transactions simpler and easier. Contractual frauds can be avoided by acquiring accurate and relevant information. This information can be obtained online or through a number of leading financial newspapers and magazines like Economic times, Forbes magazine, 99acres.com etc.

7. Employ different methodologies to make money.

For a successful investment, looking at different ways to make money is essential. In this regard, focus should not be on the market value, but on positive cash flow. This requires a little more hard work. Depending on just realtors and their data bank of listings is not sufficient. An online search accompanied with the help of a realtor can yield better results.

Investing in real estate

Knowing about property dealing is mandatory before signing the dotted line.

8. Treat every opportunity as a business.

When deciding to enter the market of real estate, never let any opportunity run you by. Regardless of the price, localities, or availability of a property, always keepyourself abreast of the developments taking place in that sector. You can begin by drawing up a business plan to stay organised.

9. Keep cash flow in mind.

This will protect you from stagnant financial properties and hence losing a lot of money. A piece of property costing a bomb today might not sell for the same in future. Keeping track of cash flow can help prevent loses in future by returning money in the form of mortgage.

10. Do not be afraid of investments and setbacks.

“Investing” is a euphemism for gambling. There are always numerous risks involved when indulging in the same. However, do not be afraid to jump in the fray. Investing in property and gold are two primary avenues to generate positive cash back for sure.

Author-Bio: Tina Jindal is a professional editor and content writer. She has worked with renowned publications and is currently pursuing her love for writing. Be it Cookery, Gardening, or Real estate, she has tried her hand at all. You can contact her at [email protected].

Erin Emanuel