by Anushree Ghosh,
Investing in real estate simply means that you have a clear vision about gaining more from the money you own currently. It is one of the smartest and safest ways to invest. Unlike the stock market, it is relatively stable and you have a physical asset for assuring yourself of the possession.
So, here are the key fundamentals to know before you start investing in real estate.
Analyse the Market
There are numerous hooligans in the market who can rob you if you act naïve in your decisions. Hence, before approaching any real estate agent, do thorough research. Know the value of the property in the areas of interest. Knowing the market value will help you negotiate the best rate.
Look Out for rental properties
The rental property serves the purpose of a secondary income. You must think about the cost of maintenance before you start calculating profit over the coming years. Also, you can think of living in one of the parts and renting out the other parts. And if you have bank loans to take care, then what better than submitting your first rent check as the first EMI.
Start over with a small investment – a duplex or small flat. As you learn the techniques of the business, you can start investing in the bigger properties.
In order to make quick money, new real estate investors try to resell the property as soon as they buy it. Remember! It is not an easy option, you have to wait for the right market condition.
Don’t invest in the wrong property
You’ll have to locate the right investment option, the one that will beat the average performer. It may be because of an upcoming government project or any other infrastructure development. Look for places which will outperform the others in the coming years.
Understand the hidden costs
It is important that you consider all the costs involved in acquiring the property. If possible, seek the advice of a professional who can see through the costs that are otherwise neglected by the eyes of a novice. Also, make sure that you can hold onto the property for a certain period. Add up the miscellaneous and maintenance costs. Always make space for more expenses as you never know when an extra cost pops out.
Don’t try to micromanage
When there is only one property you may have all the time in the world to manage it but what happens when you do your second, third, fourth investments and so on. Your job list keeps on getting longer. You can’t possibly check the background of all the tenants and deal with the maintenance issues of all your properties at once. It becomes a full-time job and hiring a property manager can be really helpful who can take care of all the requirements.