5 Factors To Consider For A Successful Real Estate Investment

Real estate is one of the favoured sectors among the investors across the globe due to the attractive profits attached to it.  

Making money in real estate is not that easy and the builders in Nashik are focusing well to fetch maximum investors for their projects and investing in a new residential property in Nashik is a promising sphere that is expected to yield good returns for the investors. 

In real estate there are different categories like residential, commercial, retail and land/plots. However, for investors it is crucial to keep in mind certain factors which include steps like studying the investment horizon, market research, asset finalizing, purchasing and selling the property at the right time for greater ROIs.

As an investor, one must begin by selecting the right property. Here are the 5 important factors for a successful real estate investment:

1)    Determining location and asset: The very first step for a real estate investment is selecting a location and then targeting an asset/property within that location. Generally, emerging locations need a good time period to develop and sometimes, reselling is not easy if development is not prominent or does not happen as per the proposed plan of the emerging locations. Thus, researching about the location is very crucial. One must try to keep the investment horizon longer to avoid problems in near future.

2)    Researching and knowing the market: Investment in any sector is filled with potential challenges and issues, which is similar to the real estate investments. So, to be a successful real estate investor, one should acquire an in-depth knowledge on the developer’s track record, quality of the previous real estate projects, economic condition, and their position in the market and so on.  Also, gathering information on existing property rates and previous appreciation of properties in each of those particular locations of the market is extremely important.

3)    Financial Analysis: This is an important factor. The more one researches on the financial structure of the realty market, the more one understands the current trends. On the other hand, it is also necessary to check personal monetary status, growth potential and the maximum amount of loan one can incur. This helps the investor to make plans for the future and predict when trends may change, creating opportunities to avoid financial distress.

4)    Planning an exit strategy: After investing in a property, it is vital to monitor the rate of appreciation taking place year on year and accordingly pre-plan the exit strategy to extract maximum return on investments. For example, some investors choose to hold the property; however, it may not be a good decision to hold the cash flow when the market is demanding the flow. So, the exit strategy is as important as determining a location for investment. In India the residential properties are yielding about 2 -4% a year. Investors can take time and hold the property for a longer time, but sometime taking more time to exit affects the Return on Investments (ROIs).

5)    Stay Educated: All the above factors may go in vain if the investor does not stay up to date with the laws, regulations, market trends and make adjustment to the present plan accordingly. Thus, for being a successful investor, one needs to stay alert, allocate good time and adapt to any regulatory changes or financial trends. 

Most importantly, taking a sensible methodology, testing our presumptions, learning the figures that impact returns and monitoring where cash is made and lost in the investment is a must.