A property purchase is one of the most significant purchases you will make in your lifetime. It is, however, a long-term financial investment. Whether you’re a first-time house buyer or an experienced pro, you’re likely to confront a dilemma when deciding between a plot and a flat: which is the better investment?
Before you choose between the two, think about important considerations including easy financing, high profits, and tax advantages. This article will help you learn more about the advantages and disadvantages of these two real estate investment possibilities.
The worth of a house
Flats and land will both rise in value over time, depending on a variety of circumstances. Any additional connectivity, such as a metro line, transportation center, or road, stimulates growth, attracts more people to the region, and raises demand for your home.
Income
When it comes to revenue, what is the difference between a plot and a flat? After you invest in a prefabricated house, you can start earning rental revenue right away. A plot, on the other hand, will not generate rental money until you build a house on it. However, if you build an apartment on your property and sell the individual apartments, you will make a profit in the long term.
Financing
Between a plot and a flat, which is easier to finance? Home loans will readily meet your bills if you are buying a flat. It can only be used to purchase a completed or under construction home.
If you want to buy an empty piece of land, you can take out a plot loan. This loan can only be used to acquire a plot of land for residential use.
Tax advantages
If you buy a home with a home loan, you can deduct the interest paid up to Rs. 1.5 lakhs off your tax bill. Furthermore, repayment of the principal amount is tax-deductible up to Rs. 1 lakh. In the case of plots, the interest deduction is available only after the construction is done.
Flexibility
In the fact that they already have a well-defined structure, flats or apartments are rather limited. A plan that has been determined in advance by your developer and his architect.
Plots, on the other hand, are an excellent option if you want to develop a villa or a house. You’ll also like the freedom to customize it to your specific requirements and preferences.
Value of resale
Because of construction deterioration and normal wear and tear, the value appreciation of flats/apartments is slower than that of plots.
Unlike flats, plots in desirable locations gain swiftly due to high demand from wealthy buyers who want to construct horizontal mansions.
Plots are thus a fantastic choice when it comes to maximizing your investment’s resale value.
Conclusion
With that said, both apartments and land have their advantages and disadvantages. It all comes down to personal preference when it comes to determining the investment gap between a plot and a flat and which one is best for them. You’d have to be careful with some movements if you had a storyline. However, the benefits for plots may be far greater. And you’d have to make do with the construction standard in the end. Flats, on the other hand, are hassle-free because everything is provided and you may begin earning right away.
Budget 2022 – Impact on real Estate
Many people were unsurprised by the Union Budget 2022. Routine steps were taken to digitise rural areas, with a greater emphasis on healthcare and education. However, the budget 2022 also emphasised openness in the real estate market as well as affordable housing for everybody.
Despite high expectations for reforms to the income tax slab, no reforms were made. The RBI’s launch of the digital rupee using blockchain technology in 2022-23 was a major highlight. The following are some of the key points we believe were the budget’s highlights. Let’s take a look at what effective actions are being implemented in the real estate industry.
Housing and urban Development
The allotment of Rs 48,000 crores for the PM Awas Yojana was big news in real estate.
This will certainly help the real estate sector with around 80 lakh houses to be completed under PM Awas Yojana in rural and urban areas. This will significantly increase the affordability of residential real estate.
Rural and urban regions were also covered by these funding allocations. In 2022-23, 80 lakh families would be identified for the affordable housing project.
The Projects that have previously participated in the building of these affordable housing projects may also benefit. Aside from that, 60,000 crores have been set aside to provide 3.8 crore families with access to running water.
While presenting the Union Budget 2022-23, Finance Minister Nirmala Sitharaman announced the government’s decision to organise a high-level committee of urban planners and institutes to develop policies for sustainable urban development. The Finance Minister also stated that tier 2 and tier 3 cities would need to pick up their development efforts.
These steps would assist the government in resolving urbanisation issues such as wasting of productive land and environmental dangers by concentrating on urban development through the creation of an urban sector committee,” said Jaxay Shah, Chairman of ASSOCHAM’s Western Region.
Some of the industry’s requests included lowering the GST on under-construction houses, lowering the GST on critical raw materials, increasing the interest exemption for homeowners, and awarding the sector ‘infra’ status. Last but not least, an extra allocation of 19,500 crores for manufacturing solar modules speaks good for real estate,” stated Atul Goel, MD, Goel Ganga Group & President of Goel Ganga Group (Elect.)
NGDRS Land Records Management
The Union Finance Minister indicated in her recommendations for the Union Budget 2022-23 that states would be urged to use the “Unique Land Parcel Identification Number” for improved land record administration (ULPIN). It will enable the management of land records to be smoother and IT-based.
It was also indicated in the Union Budget 2022-23 suggestions that the government will try to transliterate land records into all of the languages listed in Schedule VII of the constitution.
The Union Budget proposes establishing seamless links with the ‘National Generic Documents Registration System (NGDRS)’ in order to improve digital land record administration. This will permit a ‘One Nation-One Registration Software’ and a standard method of ‘Anywhere Registration’ of Deeds and papers.
Overview
Due to the Coronavirus-induced problems, India’s real estate business has suffered from a slowdown in property sales, fewer site visits, and project delays during the previous few years. Conclusively, the Union Budget 2022-23 intends to increase the supply of affordable housing and boost the nation’s multimodal infrastructure.
What makes you Spot a Good Property !
Getting a good deal on a plot you want is less of a strange coincidence and more of a result of hard work. Before entering into a real estate transaction, first-time buyers should do their homework.
Examine comparable listings
Visit several properties that have similar amenities, location, square feet, and other features, and compare the listing prices. Square feet are the most important, and properties within 10% of your property should be considered.
You can begin by estimating the value of the property using online tools. However, it is preferable to compare actual property prices by physically checking them and speaking with the seller. Something may be wrong if an asking price appears to be strangely lesser or higher than the average rate.
Examine similar sold and unsold listings
Examine the average sale price of properties sold in the previous three months. Also, evaluate properties that are preferably adjacent or within a close radius of each other and are the same age and condition. It’s also a good idea to compare the asking or listing price to the actual sold prices to see how much wiggle room you have during negotiations. Real estate agents create a document called a Comparative Market Analysis, which is a reasonable way to understand current prices.
To remain competitive in the market, savvy sellers know not to overprice the property unnecessarily. If the plot has been on the market for an extended period, it could be due to overpricing. As a result, it’s critical to inquire as to how long the owner has been attempting to sell it.
For unknown reasons
If the plot appears to be underpriced, it could be because the owner is in a hurry to sell it for personal reasons, or because the plot has some location or foundational issue that could later turn into an expensive affair. If you suspect the latter, you should have a thorough inspection performed.
Likewise, a house’s market value is a launching point for a negotiation based on land’s features and location. The appraisal value, on the other hand, is determined by a licenced third-party professional. Get an appraisal value for the open plot based on the information you have.
Obtaining information from a variety of sources
Don’t just take the seller’s word for it, no matter how many different buildings you look at or how compelling or unshakeable each seller appears to be. To begin, you can use various online property valuation tools to get a general idea.
Convenience is important
Sellers may agree on the general market value of the property but the price is higher due to amenities. In such cases, it is preferable to have such elements appraised and assets checked for worth to avoid overcharging.
If the seller already realises that the land is practical for you or a dream investment for you, they may overprice and entice you into a high bidding war. Some people may overprice an open plot simply because of its prime location. Therefore, follow the future goals.
Take your time tracking down the suitable investment property.
Seeking the perfect property to invest in necessitates knowledge like your budget, market, negotiations and the intention to buy it.
There is no such thing as a perfect property. It is all about locating the investment property that better matches your expectations. If you’re just starting, buy something at the low end of your price range to know the ins and outs of being an owner of the property.
The Benefits of Investing in HMDA approved plots
When it comes to living returns on investment, plots always outperform other property kinds. If you want to buy a plot in Hyderabad, look for those that have been approved by the Hyderabad Metropolitan Development Authority (HMDA).
What Is HMDA?
The Hyderabad Metropolitan Development Authority (HMDA) is the agency in charge of planning, approving, and authorizing civil structure development and construction in the Hyderabad Metropolitan Area. Because they are supervised by professionals in terms of safety, HMDA-approved layout plots are trustworthy and reputable for purchasing.
A major layout that has received HMDA approval is one in which the master plan has been approved by the body and is regulated in terms of land use and development activities in the area. After getting all other valid approvals, a valid layout approval can allow you to utilize, build and expand in the region.
The location of a real estate investment, whether it is a plot or a home, is critical. Investment is a long-term activity, and even a little blunder in place selection can result in a significant loss. Some charting projects are far less expensive than others, and we choose the wrong option because of our ignorance and desire to pay less and save money. Perhaps that area will not develop in the near future. As a result of the low rates, we prefer to lock our money in such places and do not receive a fair return on investment.
Dhruva’s experts examine HMDA-approved plots and discover what makes them a decent investment opportunity.
Development that is certain
The benefit of owning plots that have been certified by the HMDA is that infrastructure development is guaranteed. A developer/buyer is required to construct utilities such as a proper water, drainage, and power infrastructure, as well as properly-laid roads, street planting, and lighting.
Layout plots certified by the HMDA are in good locations, ensuring infrastructure development as well as water, drainage, electricity, and other needed services.
One of the key benefits of investing in HMDA-approved plots is that developers are required to mortgage 25% of the plot to HMDA in order to ensure infrastructure development. However, this area will be released once the area’s infrastructure has been completed.
Appreciation of capital
In the real estate industry, capital appreciation is a crucial indicator of returns on investment. This is guaranteed in HMDA-approved plots. Development is guaranteed on these sites, the investor may expect robust and ongoing capital appreciation. However, in comparison to demand, the availability of these plots is extremely limited. As a result, you may have to pay a bit more when purchasing, but due to the limited supply, these plots will undoubtedly fetch considerably bigger earnings in the coming years.
A loan facility
So, if you’re convinced enough to acquire an HMDA-approved plot but worried about the financial aspect, don’t be. If you’re a potential buyer, banks will give you money to purchase government-approved plots. Aside from substantial profits, investment in permitted plots also aids the city’s general development since officials plan the area’s overall development.
REAL ESTATE TERMS TO KNOW BEFORE INVESTING
Real estate investment is quickly becoming the most favorite form of investment for Indian families. In today’s times, where everything is so unpredictable, one should plan wisely for themselves and their families. There are a plethora of options to invest in the market. One needs to carefully assess and get information about the varied options. A venture which has approvals from either HMDA or DTCP is the safest bet as compared to others. We should not fall into the trap of builders trying to convince otherwise.
1. If you are keen to invest in Real Estate, here are a few terms which you should be well-versed with. This will make the whole process easier to understand too!
2. Return on Investment (ROI) – ROI measures the money or profit that you make on the Investment as a percentage of the cost. If you buy a property worth Rs.15,00,000 and sell it for Rs.20,00,000, your profit is Rs.5,00,000. The profit is half of your Investment, and hence your ROI would be 50%.
3.Amenities – Every project has features that enhance its attractiveness and increase the occupant’s satisfaction. Eg, well built roads, avenue plantation, children play area, underground drainage system, water facility to each plot etc.
4. Appreciation- An increase in the value of a property due to changes in market conditions, increase in supply and demand and also because land is a limited resource. It’s directly proportional to the population. As the population increases, the demand for land also increases.
5. Bayana (Token Amount) – An Indian term used to denote the token money given to the landlord to informally freeze negotiations on a particular property, after the initial terms and conditions have been formalized.
6. Broker/ Dealer- A broker is a person or a company who acts as an agent, and brings two parties together to strike a deal. After the deal is finalized, the broker has to be paid a fee by the parties.
7. Buy Back Offer- When a builder intends to buy back the property after a fixed period at a predetermined appreciated rate, it is known as buy back offer. Usually, the builder offers an assured return of a pre-decided percentage to the investor for the buy back period. This may usually take place two to five years after the booking was done by the buyer.
8. CIBIL – Credit Information Bureau (India) Limited (CIBIL) is India’s first Credit Information Company (CIC) founded in August 2000. CIBIL collects and maintains records of an individual’s payments pertaining to loans and credit cards.
9. RERA – The Real Estate (Regulation and Development) Act, 2016 (RERA) is an Act of the Parliament of India which seeks to protect the rights of Real Estate buyers as well as help boost investments in the Real Estate Industry. The bill was passed by the Rajya Sabha on 10 March 2016 and by the Lok Sabha on 15 March 2016.
10. Downpayment – The initial payment done by the buyer to the builder for which is a portion of the total price of the land. There is no loan applicable on this as this is done as the first payment.
11. EMI Equated Monthly Installment (EMI) – It is a fixed payment amount made by the borrower to the lender at a specified date each month. Equated monthly installments are used to pay off both interest and principal each month, so that over a specified number of pre-decided years, the loan is fully paid off by the borrower.
12. Landlord – A landlord is the owner of a house, apartment, condominium, land or real estate which is rented or leased to an individual or business, who is called a tenant.
Property Insurance- Property insurance provides protection against most risks to property, such as fire, theft, weather damage etc. This includes specialized forms of insurance such as fire insurance, flood insurance etc.
13. Seller’s Market – A seller’s market is when demand for property is greater than the supply. The result is greater opportunities for owners who may find someone willing to offer the asking price or even a figure greater than the asking price.
Now that you have information about the basic Real Estate terms, it would be easy for you to understand these terms if you are absolutely new to investing in Real Estate.
Dhruva Projects provides a great and rewarding investment option to the ones looking out to plow their money in safe and secured options. Open plots bring with a lot of flexibility & ease of possessing the property.
Why OPEN LAND is the Most Preferable Investment
Over the previous two decades, the value of land has soared by over 800 percent, making it one of the most popular investment options. Land acquisition has always been limited to huge development enterprises, farmers, and affluent people.
A residential-sized block of land would allow buyers to participate in future development advantages without having to purchase huge acres as a developer would. Many people are attracted to land investment because of its simplicity and openness. There are no hard principles for buyers to grasp; all they need to know is that land is in high demand. Purchasing land is easier and faster than purchasing a home, however, you should still consult a lawyer to safeguard your interests.
Unlike stocks and shares, a land buyer will always have a tangible asset to touch and use. Land values will almost always rise due to limited supply and demand, having already surged eightfold in value over the last twenty years.
Following completion, the new owner has complete authority over any maintenance, redesigning for development, obtaining planning clearance, and selling their property.
Traditionally, land investment was restricted to elite corporations, farmers, and affluent individuals; nevertheless, it is now possible for ordinary people to invest in land. Land agents, as they are known, acquire land from various sources and then sell it to customers, much like an estate agency does with houses. Some land agents specialise in selling land to long-term land investors. This land is frequently near sites that are being developed or are about to be developed, so it could be ready for development soon!
Land investment is quite straightforward and clear, with no hard issues to deal with, and there is always a need for it. Stocks and shares, for example, are not tangible, whereas land is! Following the completion of any land investment, the new landowner has authority over the land’s maintenance, planning permission, and potential sale. Any investor interested in purchasing or investing in the land will, of course, want to inspect the property first and learn everything they can about it before proceeding. With this in mind, it’s a good idea to keep your land in good condition. The location, development expenses, and community attitudes will all play a role in future land value.
So, as you may be aware, location is critical in determining the future value of the land; land located near a major highway connecting two towns will most likely increase in value! The higher the value of your land, the closer it is to a major road or town. The direction of growth is highly significant in determining which plots of property are most valuable, therefore investing in land in a developing neighbourhood will yield a higher profit.
Once a person has decided to buy a piece of land, he or she will need to consult a solicitor to draught a contract. They will also inquire about any future developments that may affect the land, such as the possibility of a large motorway being built next to your new piece of land, which will have a significant impact on its value.
Land is a long-term investment; therefore, timing is crucial. Furthermore, the majority of land does not generate a consistent stream of revenue. Many investors circumvent this by leasing land for allotments, tenant farmers, parking, or even a used car lot! While you wait for the value of your land to rise, this can help you make some money. It’s easy to see why land is becoming a more popular alternative investment!
Any newbie can succeed with these four Investment ideas
One of the most appealing parts of real estate investing is the diversity of possibilities available. If you’re considering investment property techniques, whether you have a real estate license or not, you’re probably wondering which path to pursue. To assist you in making your decision, we’ve compiled a list of the top four real estate investment strategies for beginners.
1.Real estate wholesaling as a financial strategy
Wholesaling real estate is an excellent method to begin your real estate investing career. The key advantage of this technique, which makes it especially suitable for beginners, is that it requires very little starting cash. As a wholesaler, you must locate a property for sale, obtain a contract from the seller, locate a buyer, and assign the contract to that buyer. The procedure normally takes a few days or weeks, and you can walk away with a few thousand bucks. The only expenses you will incur are those incurred in locating a home for sale and promoting the property to potential buyers.
While anyone can engage in real estate wholesaling, this short-term investment approach is more advantageous for those who hold a real estate license.
Why? For a variety of reasons:
You will have access to far more properties for sale as an estate agent than an ordinary investor. This means you’ll be able to uncover houses for sale below market value, making marketing the property easier and increasing your profit.
Once you have your license, you can begin to establish a real estate network of property sellers, purchasers, other realtors, investors, and so on.
While wholesaling is possible without a license, obtaining a real estate license for the sake of investing would undoubtedly make you more competitive.
2. What is the fix-and-flip investing approach and how does it work?
Fix-and-flip is another great approach to get started in real estate investing. This short-term investing plan allows you to become more involved with the property while still making quick money in real estate.
In a fix-and-flip, you purchase a low-cost investment property (typically in need of repairs), make the necessary renovations, and then resell the property for a higher profit.
This method is beneficial to new investors because it allows them to sample the flavor of real estate investing before deciding if it is the correct choice for them without committing to a property and a mortgage for decades.
3. The buy-and-hold approach
It is one of the long-term real estate investment methods. When you hear about real estate investing, it’s likely the first thing that springs to mind. It’s a great option for new investors because there’s no need to close the sale right away, and you can make money in the long run.
Buy-and-hold refers to purchasing an investment property with the intention of holding it for the long term until you decide to sell. As the value of homes rises over time, you profit from real estate appreciation. Natural appreciation is a terrific way to make money in real estate while sitting on your hands.
4. What about properties for rent?
The last of the novice investment property techniques is a buy-and-hold strategy. You can rent out your property and make money in the short term instead of keeping it and waiting for appreciation to happen. When you acquire a rental property and locate a renter, you can start earning a consistent income right away. The rental income will be a great addition to your commissions as a real estate agent. Furthermore, as a realtor, you are familiar with the local market and where housing demand exists, so you will be able to locate a successful rental property to invest in.
Choose the strategy that best suits your objectives.
Real estate investing is a lucrative business, especially for realtors who are familiar with the industry and the local property market. All that remains, is for you to decide which of the aforementioned top investment ideas is best for you and to begin making money as a property investor.
Benefits of buying a property when it’s newly launched
When a prospective buyer is on the lookout for a Real Estate investment then the terms like “pre-launch offer” or “new launch” seem quite attractive. The main reason behind this is that during this phase, the builder gives an interesting offer to the investor to attract them. Usually the opening price or launch price would be lower than it would actually be after a few weeks or months. Investing during this phase can be beneficial for an investor as they can get the advantage of the lower price or offer.
The Initial Investors have an advantage
Many builders give interesting offers during the initial launch phase since the whole market is very competitive. There are a plethora of options available to the investor to invest. So the builder should plan and do something unique so that investors get attracted to invest. They could be discounts on booking a plot or it could be giving a free gift in the pre-booking phase. By doing proper market research of the location and its advantages, one can easily invest in such newly launched projects.
The investors should book before the increase in prices
Another advantage of booking a newly launched project is that one can freeze on the price till one gets the possession of the property. The whole market is quite unpredictable and volatile, so the property prices can increase any time. Usually the prices might go up a bit after the launch phase of a project. There could be a variety of reasons for the price hike. It could be new infrastructural developments in that area, cost of raw materials might increase, the cost of hiring labour for work or maybe some change in the laws. If you make a decision to buy in the “newly launched phase”, then one might save on a lot of additional expenses that might arise in the future. The builder might also increase the prices once the sales have started to pick up or if there are more projects coming up near the project of the particular builder.
A smart investment in suburbs
In major cities, the central city area is already built up well and the property prices are also very high. There are very few open spaces left to start a new project. So now, the builders have started moving towards the suburbs which not only offer great locations but also are much more affordable than buying an open space in the city center. Connectivity is improving and now reaching suburbs is no big deal as there are various modes of transport available these days. Builders also make sure that the investor gets the most of the investment made by them.
If you plan to expand or diversify your investment portfolio and are keen to invest in Real Estate, then look out for projects which are newly launched. This will not only mean spending less money but also taking advantage of the additional benefits given by the builder. Do proper research and invest with a builder whose plots are approved by HMDA DTCP/ RERA. Also check all the legal documents and the credibility of the builder.
Dhruva Projects has recently come up with their newest venture, Dhatri County at one of the growing areas, Kompally. HMDA and RERA approved, this project offers Premium Residential Villa Plots at affordable prices. Additionally, if one pre-books a plot now, then they can get a free Gold Coin worth 5 grams. Dhruva Projects is a well-known name in Hyderabad Real Estate and has completed many projects successfully. Invest with Dhruva and avail the best opportunity now.
Buy Your Dream Property With Dhruva Projects
Dhruva Projects came into being to make purchasing a property affordable and a hassle-free process. Real Estate in Hyderabad is booming like never before. If you are planning to buy an affordable plot in Hyderabad, then the micro-markets along the Outer Ring Road (ORR), including Tukkuguda, Mansapally, Adibatla, Yachram and Shadnagar have gained immense popularity over the last few years. These areas are developing at a fast pace and also promise high Return on Investment (ROI).
Dhruva’s first project Radha Krishna Enclave provides Residential Open Plots in Dubbacherla which is near Mansanpally “X” Roads. The area has quite a well-developed infrastructure with everything available at an arm’s distance. It’s lush green environment is one of its major USP’s. The investment potential has increased in this area due to its proximity to Outer Ring Road, Banglore Highway, Electronic city (Maheshwaram), Rajiv Gandhi International Airport, Near to My Homes Smart City, FAB City, Apparel Park etc. This area is also away from all the noise of the city where one can relax and rejuvenate on the weekends. In the last couple of years, this area has seen a 40-50 percent growth in the land rates and it’s already a hit among the millennials. The trend might grow further with the development of the proposed ‘Smart City’ in Shamshabad, which is only half-an-hour drive away via the highway.
Radha Krishna Enclave is a project which provides Residential Open Plots at a prominent place. The plots are affordable and come with a rewarding future. These plots are DTCP Approved which makes it a secure and safe investment. It has a beautiful entrance arch with ample street lights. Its alluring landscape makes one feel serene and happy. The kids play area is the other major attraction of this project. The whole layout of the project is according to Vastu which makes it an attractive place to invest.
We strive to sell properties and assets that are affordable, comfortable, sustainable, and beautiful. Also the location matters a lot because that decides the kind of returns one can earn in the future. Radha Krishna Enclave’s plots are in close proximity to the major highways like the Banglore Highway, Outer Ring Road, Regional Ring Road and Peddagolkonda (Exit no-15). It is also quite near the Rajiv Gandhi International Airport. The property is also surrounded by many Gated Villa Projects. It is also very near the most ambitious project which is My Homes Smart City. All these make sure that the plots will get a huge appreciation and the land rates will always be on the rise.
Our Mission is to enable our customers to have affordable pieces of land and have better yield on their investment in Real Estate.
The second project is West Meadows which again provides Open Villa Plots which is located at Kistareddypet. All the plots here are HMDA Approved.
Kistareddypet is a small village located adjacent to Nehru Outer Ring Road in the southern periphery of Hyderabad. Many localities that surround Kistareddypet such Beeramguda, Navya Nagar, Ameenpur, and Patancheru. Excellent connectivity to the prime industrial zone of Patancheru and IDA Bollaram has made Kistareddypet a prominent destination among home-buyers. Kistareddypet offers various investment options for investors.
This place has good connectivity and has major location highlights. It’s close to the Outer Ring Road. It has many good schools nearby like Silver Oaks International School, Origin International School & Bhashyam Bloom School. Few Colleges are also in close vicinity which makes it a great investment from the children’s point of view. The project has an Avenue plantation with tree guards & a compound wall with Entrance Arch. The project has a Clear title 40′ & 30′ CC Roads. Kids play area is another highlight of this project too. There is ample electricity with street lights.
At Dhruva, we truly believe that everyone deserves to own a piece of land that they can call their own. With our commitment to selling properties and assets that are affordable, comfortable, sustainable and beautiful, we are well positioned to give you more bang for the buck.
8 Common Mistakes to Avoid While Investing in Real Estate
Real Estate investment is definitely one of the most rewarding investments for our future safety and well-being. But we often overlook details which might lead us into investing into the wrong place. We should avoid making blunders and take care of a few things before making the decision to invest.
Real Estate investment is soaring
With the ever increasing population, the demand for more land keeps on increasing with each passing day. Every piece of land available is being converted for corporate offices, residential dwellings etc which has put an excessive pressure on the available resources.
Real Estate investing rewards with appreciation which is unmatched to any other form of investment. This is the reason why it attracts more people to invest as a secure asset for their future.
Common mistakes by Real Estate investors which should be avoided:
1. Not checking paperwork properly – There are many people who have been cheated by giving the investors fake documents. The documentation has to be in place before the investor gives away any amount to the real estate agent/ builder. There is a possibility that people might not check and verify the documents before signing them. This could result in them losing the property also. The documents need to be double-checked and verified before one makes a wrong decision. The documents must be up to date and scrutinised well.
2. Not calculating the costs – One invests in real estate to earn profit. So a thorough calculation needs to be done on the amount which will be invested and the appreciation earned in future. Underestimating costs can land one in trouble. Taxes, government fees and registration charges associated with a property should also be kept in mind before you buy that property.
3. Don’t trust blindly – One should not rely on word of mouth for purchasing a property. A thorough research should be done before making any commitment. A third party can’t be trusted blindly. The company with whom you plan to invest should be credible and have goodwill in the market. Striking a good deal with a known name is always better than investing with someone who is completely unknown in the market.
4. Make a plan beforehand – One needs to plan as to which area would give them more returns and how much investment they can make at present for their future. There are many deals which might look attractive at first. A proper analysis before making the correct decision is very important.
5. Not enough knowledge of the local market – One may not have a prior knowledge about the real estate market. It’s important to do a survey of the present market conditions and how lucrative the investment might be in future. One should know about the land value, property value and the places which are growing in the current market. These would ease out the decision to buy a property which is well within the budget and also worth buying. Only buying a property is not the final thing. One should have enough capital reserve for maintaining it as well.
6. Buying in the wrong area: Since there are a plethora of attractive investment options, it’s quite easy to get confused. A property should not drain away your money. A well-developed or developing area will fetch good returns in future. The land should have easy connectivity, accessibility to necessary things and services, and should be a good locality with good infrastructure. All these things should be kept in mind while making the decision.
7. Having high expectations: We all want a rewarding appreciation from the piece of land which we have invested on. But our expectations should not be sky high. We all should aim towards having a realistic profit in the future from the property we have invested in.
8. Choosing the wrong real estate agent: A true real estate agent will always guide correctly so that an investor can make the most out of the deal. He will also refrain you from making any mistakes which you might repent later. So, it’s important that the agent has a good track record in the market and is reliable. A good agent will always make sure that you get a great appreciation with the money you have invested in. So it’s always better to check the credibility of the real estate agent before getting into the deal.
Whenever you make the decision to purchase, just keep a check of all the above mentioned points so that a safe investment can be made.