Factors that matter in Real Estate Investment
Post by : favouritehomes
Investing in real estate is a little complicated and needs its own share of homework before investing. The goal of investing here includes long-term benefits and doesn’t allow for much liquidity, making it imperative that you keep a number of factors in mind before putting in your money for the long haul. Let’s take a look at some of these factors:
This is of primary importance as no one wants to be associated with an uncomfortable area. Buy properties where there are good schools, colleges, job opportunities, etc. Such properties fetch better returns; and just in case you want to give it out for rent, remember that no one wants to rent in an area that doesn’t have sufficient facilities and infrastructure. This is called buying in cash-flow positive properties.
Investment in real estate gives greater control to earning profit and comes with minimal risks. As compared to investment in equity, there is far more predictability in investing in rental properties. Steady passive incomes from rental payments can help tide you over during bad times.
Unlike other investments, real estate investments are more secure, where prices do not fluctuate wildly, but remain steadfast in their value. Real estate is also one of those rare forms of investments that can even be insured against damage from natural or man-made calamities. This way, the loss can be recuperated by the investors â€“ unlike in equity and debt fund investments.
Banks are ready to fork out about 80% of the property’s cost amount in the form of a home loan, making an investment in real estate a reasonably flexible investment that sits comfortably in your pocket. Banks also know real estate investments to be among the safest and most profitable ones and are comfortable offering large sums of money as loans. The investor also gets to benefit as he enjoys the profits with minimal investment of his own money.
The best part of getting a home loan for buying the rental property is that the investor can use the rent payments against the repayment of monthly EMIs on the home loan. This way, the investor benefits by virtually paying off his loan without dipping into his own pocket- plus getting a fully paid for the property at the end of the day, which would have also appreciated in its value!
Though it’s hard to predict real estate trends, prices always tend to appreciate over the long run. You just need to be patient!