Real Estate Investment
Real estate is always said to be the safest investment option, and the coronavirus pandemic has again proved it right. Amidst pandemic, investors are preferring to invest in real estate as builders are offering tempting offers. Investment in real estate comes with great potential to grow in value over time.
However, regardless of the type of property you are purchasing, whether it’s for self-occupancy, rent, or purchased with an idea of reselling it in the future to earn a profit, investing in real estate always requires a lot of money. So, it becomes very important to take decisions wisely and make a decent choice to ensure a profit on your investment.
Here is a quick guideline which one should always follow while making any investment in real estate.
Valuation of Property
The property price depends on the real estate valuation, it includes investment analysis, cost of purchase, taxation and insurance if any. Hence, it becomes very important to get property valuation before you invest in one.
Here is a quick tips to estimate the valuation of a property:
- Compare the property with recently sealed property with properties/characteristics.
- Analyse its cost with respect to area and construction.
- Based on expected cash inflows when the property is given on rent.
Budget an important factor
Before you start looking for a property, you need to be clear about the budget. As buying a property needs a good amount of money, you should be clear about your financing idea. If it’s a home loan, always keep the borrowing amount within your repayment capacity. Doing this will help you to get the ideal amount without hampering your essential needs.
Do your research
You need to do proper research before buying the property. Make sure that the property.
- This research includes selecting the location wise analysis, as depending on your location the price for the property varies. It also decides your estimated rent.
- Research the RERA approval.
- The type of Khata it belongs to. ( A Khata/ B Khata)
- Research regarding the builder’s reputation.
Compare for cheaper Interest Rates
The cost of borrowing money might be relatively cheap in 2020, but the interest rate on an investment property will be higher than traditional mortgage interest rates. If you do decide to finance your purchase, you need a low mortgage payment that won’t eat into your monthly profits too significantly. Remember your rate of borrowing is going to decide your finances for years as home loans are generally long is long tenure loans. Hence, comparing different home loan products with different lenders to get a cheaper loan plays a very important role.
Don’t let your emotions win
When buying a home, some listen to their heart more than actually thinking about it logically. This is because buying your own home has a lot of emotional significance. You relate to so many things that are perfectly fine but you thought you would have to face a financially tough situation when following your heart. But what you need is to hold on your emotions and make them as per your affordability and financial status. Remember it’s a huge investment and you have to be logical.