Are you looking for Real Estate Investment? We all at some point of time thought to buy real estate.
Real Estate has a lot of potential. In the recent years we have noticed how prices of property has increased. Furthermore, it is still expected that the price will increase more in the coming days. We really want to gain benefits from such price-hiking. However if you really not know where Real Estate Investment can benefit you, then you will miss some of the good opportunities.
Here we will learn about all the factors of Investment.
Why Real Estate Investment?
If we compare the appreciation in Real Estate from the past January 2021, the appreciation has been very high. The demands of buying property has marginally increased. If we talk about the percentage the appreciation has been more than 20% to 30%. It is also not expected to come down in the coming days. Also, since the inventory is very limited we cannot predict if it can go down in the future. It has been a scene that buyers are waiting for more than a year to get the possession of their property. The builders are constructing fast still they are unable to meet the requirements. So Real Estate Investment will always be a beneficial in the long run.
Things to consider before Investing in Real Estate
- Future land Use
- Rental Income
- Flood Zones
- State & Country taxes
Location is the primary decision-making factor to buy a property. Before investment you have to be in touch with the property and the surrounding areas. Know of everything in terms of facilities like Hospital, School, Commercial Places, Police Station. Real Estate Investment should be done after analyzing all the factors.
2. Future Land Use
Once invested, the property will stay with us as long as we want. Considering long time investment, the appreciation will also depend how much the use of the land comes in the future. Can it serve as a Commercial Property? Does it have potential to attract wealthy investors? Always ask yourself : Why to Invest in Real Estate?
3. Rental Income
Most of the people Invest in Real Estate for rental purpose. The amount of rent will depend on the location and the surroundings. The more happening places, the more will be the rent of the property. While searching for real estate, we should know about the rents of the adjoining areas. Security, development and stable connectivity are the key factors that will ensure that the returns on the Real Estate Investment is justified.
4. Flood Zones
Natural climatic conditions around the commercial is important in determining if the property will be affected by the disaster like Flood. Proper sewage and water management are important around the Real Estate. If the property suffers regular affects from the flood then Real Estate Investment in such areas are not worth it since it will depreciate the value of it with the passage of time.
5. State & Country Taxes
The taxes implemented on the property in terms of house tax, water tax should be fairly reasonable. Real Estate Investment is often considered to be an assets, this means that the property should generate income for us. If the taxes would be high it would be of no use since again we have to invest to overcome the taxes. Note about all the taxes by the people nearby and calculate how much do they need to pay yearly to know if the cost of the property and the taxes is justified.
How to Invest in Real Estate?
- Real Estate Investment Trusts (REITS)
- Real Estate Investing Platforms
- Investing in Rental Properties
- Direct Investment
1. Real Estate Investment Trusts (REITS)
REITS are the most affordable and easy way to invest in Real Estates. They collect investment from all the investors and then owns & rent out to commercials and residential buildings. After this they provide profits in terms of dividends. This way all the revenue is evenly shared among all the investors.
2. Real Estate Investing Platforms
These days there are lot of investing platform where people can own a property according to their budget. The Real Estate companies have acknowledged the power of digital reach. The promotion is done on website and apps. The interested Real Estate Investors can buy the property. Builder shows attractive returns so that their property is sold out.
3. Investing in Rental Properties
This is best way to generate the passive income through Real Estate Investment. The property is own and then EMI is paid by the rent generated from it. This way the burden on the owner becomes very less. They generally pay a small amount in form of down payment and then remaining amount is converted into EMIs which is then paid by the rents.
4. Direct Investment
This is the traditional way of owning the Real Estate. The amount in such Real estate Investment is fairly high. Generally, savings is done for a longer period and the property is own. This way there is no involvement of any third-party. The deal is directly done between the supplier. Many people consider this the best way as they get the full ownership.
Real Estate Investment often demands lots of research and networking. If any suitable deal is done then the investment can give lot of returns. However, it is seen that since there is lot of money involved there are many builders and companies who are just in this industry for their greed. Showing projects and projecting growth they take-away the hard earnings of the common people. Many people are tricked this way. The full constructions in many scenarios are not done. So, before Investing we should carefully research and know about what we are going to own. Proper time should be taken before deciding if we can go ahead with the deal.
Ques 1 – Which Real Estate Investment is best?
Commercial Investment is considered one of the best investment these days. The returns on such investment is fairly high. If location is premium, then it could give return of about 1-2% per month. This way the property prices also appreciate and rents increases by 10% to 15% every year.
Ques 2 – Can Real Estate Investment make you rich?
There is no strict formula in Real Estate that can help you make money magically. Patience and right decision is required to make the most out of the property. Buying at the best cost and then using the space to generate the maximum is the requirement to grow money gradually.
Ques 3 – Best time to invest in Real Estate?
This depends when the price is the lowest during the course of the time. We have to stick with the property for few months before actually owning it. This way we can know when the price is reasonable. Also, knowing about the adjoining properties is important to determine the correct value.
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