Investing in Real Estate - Advantages and Points to consider before investing

A smart investment holds the potential to change our life, providing us sufficient returns to fulfill our dreams. Today, many people have an investment portfolio comprising of various investments, like stocks, gold, bonds, government schemes, etc., but one of the most underrated or ignored investment in recent times is real estate.

Advantages of investing in Real Estate

Real estate investors in India have certain advantages.

With increasing bank scams, it is no longer safe to put all your money in banks.

Gold can be stolen easily. So, it is a risky investment and also puts gold owners’ life in danger by making them vulnerable to loot and attack.

The stock market is unpredictable and uncertain. Growth of stock value can be slow, unstable, time-consuming and it is subject to market risks.

Investing in startups is also very uncertain as research shows that 90% of startups fail. If money multiplication is your goal, then investing in startups is not best for you.

Real estate investment is the best option available to safeguard  and grow your hard-earned, and secure your future.

Real Estate - a High Growth Industry

According to Indian Brand Equity Foundation, which is a knowledge point for real estate investors:

Real estate market has grown to Rs 65,000 crores (USD 9.30 billion) compared to Rs 12,000 crores (USD 1.72 billion) in the year of 2019. Housing sales crossed 2.61 lakh units in 2019 across seven major cities. Real estate is responsible for Rs 43,780 crores (USD 6.26 billion) in investment in the year 2019.

Although real estate prices fell in 2020, it is supposed to recover losses and grow in 2021.

Affordable housing is supposed to grow in 2021. Buyers are supposed to prefer large, secure homes. Tier-2 and Tier-3 cities are also supposed to get a robust growth. Ready-made homes are supposed to be the key driver for growth.

Points to Consider Before Investing in Real Estate

Investing in Real estate comes with certain risks and a beginner should keep the following points in mind before spending his/her hard earned money:

Stay Calm – Buying a property takes time, with most genuine property transactions taking a few days to be completed. While many real estate firms offer to complete formalities so rapidly, the exhibiting patience can help you find a good deal. A calm mind will help you analyzing various property deals and finding out various pros and cons of the deals. Rushing to invest in real estate can make you pay more for the property, or you may purchase one which doesn’t fulfill your expectations. Also, sellers can make delays in the projects, which could see your investment not offering any returns for a certain period, checking your patience.

Researching The Property – Doing your homework before you look for a property is critical today. With so many projects coming up, it can confuse you to choose the right real estate. The amenities on offer, the history of the construction company, the materials used, the area at which the property is located in can all play a role in determining the returns you get on your investment. Not doing proper research before buying can make you regret later, negating your investment.

The Papers – The papers of a property are the most important factor which can't be ignored. Someone who is not acquainted with the real estate industry may get scammed into buying a property with fake papers. Buying a property without clear papers can lead to long time court cases or litigations, which essentially make your investment useless. All property papers should be checked with the help of legal experts to authenticate them. Many times people sell properties below market rate, which hold more chances of having litigations or internal issues with the owner.

Market Rates – Most local governments provide a guidance to help investors know the rate of a property. Knowing the market rate can help you track local trends, ensuring that you don’t get scammed or pay a higher amount than what a property deserves. Researching for market rates and developments could help you estimate the returns you could expect in the future.

Talking To Neighbours – Talking to the neighbours can help you get a first-hand perspective of how things are in a locality, helping you narrow down any problems or areas which could dilute an investment. Talking to them can also help you know how the area has developed and the scope for future development. As neighbours are not the salesmen who trying to sell you the property, a buyer can get a clear picture of the real estate he wishes to buy.

Calculate Your Finances – It is important to calculate the finances you have for making sure that you meet your certain goals. While it is easy to get loans from banks, calculating the interest and other factors is very important. Buying a property also attracts various expenses which can be expected or even unexpected. So, its very important for a person to calculate his/her finances and estimate future expenses that might occur.

Stay Positive – It is important to stay positive while executing a real estate deal, as you may feel many times that you have just lost a good deal when deals don’t fall into place. Remaining calm and composed while interacting with property sellers is important for a buyer. To get a good deal, a person has to keep his eyes on the real estate market consistently, which requires a great positive mindset.

Negotiation – Negotiations are a key factor of the Indian real estate system, as everyone is looking for a great deal which can make them wealthy. Knowing the art of negotiation can help you save money and you may get additional facilities like parking spaces, furniture, etc. A good negotiation will help you figuring out pros and cons of the deal and hence, you might be able get prevent the deal from going into others hands.

Risk Factor – Real estate investments are typically safer than any other investments, but that doesn’t mean they are completely risk free. Legal hurdles and property disputes are very common in India and one should ensure that the property they are going to buy is clear and hassle-free. Apart from calculating the risks of present time, you will also have to estimate and calculate risks for the next 25-30 years to make your deal safer and more profitable.