Investment in any form requires a lot of critical thinking, and when it comes to investing in real estate, it requires a large share of capital. In times of uncertainty, the pandemic has caused investors to prefer large portions of their capital to safe and relatively non-volatile options like real estate. If you are looking to invest in real estate, you need to make up your mind as to where your investment should lie, like in commercial or residential. It is safe to say that investing in either will provide you with fruitful results. You will undoubtedly enjoy passive income, stable cash flow, tax advantages, diversification, and leverage once you invest in real estate. But there are few points to keep in mind when investing in real estate.
Points to keep in mind when investing in real estate
1. Establish a budget
Even though investing in real estate can be the best investment you could ever make, still, it is wise to have your budget set before you start looking out. You must keep it within your loan repayment capacity. In this manner, you will not have to hamper your essential needs.
2. Check for RERA registration of the project.
It is essential to check the Real Estate Regulatory Authority’s registration of the housing project as these are cheaper housing opportunities. You can verify the RERA number and approvals of the project online or visit municipal authorities for the same. It is advisable to compare the monthly expenses of the amenities before finalising them. You can also compare the market prices of other ready to move in properties. It is vital for future aspects to have a solid infrastructure; otherwise, poor construction could cost you extra in the future.
3. The property should have excellent connectivity.
It is an important aspect to consider when investing in real estate. Selecting a property should be limited to its architectural outlook and design. If you are looking to invest in a home, you need to thoroughly look at master and floor plans. While checking the floor plan, take into consideration the fitment of furniture. Investing in residential property that has proximity to amenities like metro stations, bus stops, malls, schools, and hospitals will benefit you personally and increase your prospects of rental income. If you are investing in commercial property that has proximity to airports, warehouses could also stand to be beneficial. Real estate experts believe that having excellent connectivity to amenities could play a vital role in the resale value that the investor will benefit from in the future.
4. Be clear with what you want in a property.
Before you invest in a property, you must be clear with your thoughts as to what you want to do with the property. You wish to earn rental income, own use or for investment resale value purposes. Once you clear your purpose, the judgement of having a property will be better. Based on your purpose, you should calculate the return on investment over the short or long term.
5. Understand the initiatives and scheme
If you are a first-time buyer, you must research as there are plenty of attractive housing loan incentives offered by the Government of India. The house owners receive interest rate benefits under the PM Awas Yojana. Moreover, there are tax benefits on the home loan interest rate under Section 24, principal payment under Section 80C, and payment towards registration and stamp duty. If you wish to lend your property, then before lending, compare the interest rates and home loan features. The PMAY benefits are offered, and you can also enquire about the transfer of loan options because you have the liberty to transfer your loan if you get a cheaper interest rate from another bank in the future.
6. Open spaces, sports, and recreational facilities
People who have done investing in real estate in the past are already aware of the importance of this point, but for first-timers, it is mandatory to understand the essence of having a property with amenities. A well-developed property will provide a long way in creating wealth by adding visual appeal and acting as an invaluable factor of functional usability in its design. Expansive outdoor spaces provide one to relax while also catering to one’s fitness and leisure requirements. Pandemic has made the population work from home, so the importance of spacious homes with the communities and a wide range of outdoor amenities has become a necessity.