Who doesnt want to make investments that are successful? However, as there is no guarantee of this fact, it becomes rather difficult to determine the kind of success one can expect out of his or her investment decisions. Real estate being a preferred asset class among investor groups while claims to provide handsome returns is inflicted by the same uncertainty as any other investment opportunity.
Within real estate there are various ways in which you can make money through different asset classes. Renting, selling, buying a property, investing in shares of real estate companies and REITs are some of the ways you can make money in this market.
However, whatever way you choose to go forward there are certain golden rules that you need to follow through. Want to know what these are? Read on.
Location, location and location:
In real estate, nothing is more important than location. To select the right location and more importantly the right property in that location at the right price will define your profit margins like nothing else. Typically, if you are planning to invest in an emerging location remember to be patient as well. As emerging areas take time to develop. Also, there can be a possibility that the development did not go as expected. So be prepared for that situation as well. In this scenario, dont get distressed if your investments are not showing immediate upward swing and keep your peace.
Research:
Always read CAUTION when investing in Real Estate. Delay in delivery, quality issues, and backing out on promises are but some of the things that are not so uncommon in the world of real estate. Thoroughness in your research of the developer in terms of track record, financial standing, earlier projects and general review of one is of utmost importance.
Know your finances:
Tax structure, payment plans, mortgage calculation, etc., there is no way to avoid all this and more. Except this fact and become comfortable with numbers. Trust us. We assure you how much ever you wish to simply forget about them, they are going to knock on your door. So, understand your financial situation, present, future and past, and figure out the amount of loan you will be eligible for. As mentioned above real estate is fraught with uncertainties. Make sure you have enough cushion to sustain these.
Exit strategy:
Have a very definite exit strategy in place. Exiting after achieving the targeted returns is a smart move. Many a times people hold on hoping that the numbers will go up. That might not be the smarted decision. For every property you invest in, have a very detailed plan. Your delay in exit can impact your returns. Hence, make sure that you have a comprehensive strategy for a property, not just in terms of buying but of selling too.
Market Intelligence:
The most important factor in all of this has to be your willingness to devote some time in understanding the real estate market. Keep an eye on the changing market trends and keep yourself updated about the market conditions and new reforms. An in- depth know how of the market will help you make informed business decisions. You might also be able to predict trends and hence, invest in valuable opportunities.
