Although financial investment instruments like stocks and other investment avenues like commodities remain prominent, real estate has been an obvious choice of investment that most Indians land their savings in for the delicious platter of benefits it serves them. However, people do not know the rules for rewarding real estate spending. Venturing into real estate investment without awareness or proper qualifications, or professional assistance is stupidity. This blog compiles five real estate investing rules for you to learn before you are broke!
1) Ascertain Purchasing Power
The first rule is to identify your financial capacity to invest. Your power to purchase depends on the investment budget you set. While you draft your budget, consider your income and the years of savings you want to use and make a realistic estimate of returns to expect from the investment. Besides, don’t forget to have a provision for every statutory expense of stamp duty, brokerage, and registration fees associated with the property purchase along with the property price.
2) Scrutinize Documents
Title deeds, registration papers, local authority and government approval letters are some primary legal documents associated with the property. As a prospective investor, you must demand them from the property seller and scrutinize them for their legal validity. Buying a property without credible documents makes your purchase null and void in a court of law. So, it’s wise to appoint a legal advisor to oversee the process and assure any legal charges and litigation are attached to any previous transactions on the property.
3) Source of Finance
The third rule is how to procure financial resources and whom to approach for financial aid. Make sure to have an ideal range of credit scores if you want to avail investment loans from credible financial institutions. Along with credit scores, banks ask for other credentials like income tax returns, salary slips, bank statements, and property documents to assess your capacity to repay loans. Remember to always approach approved banks to avail of any form of investment credit. Unlike money lenders, organised institutions offer loans at reasonable interest rates.
4) Property to invest
The fourth rule is to identify the property to invest your money in. While you choose to invest in residential development, make sure to consider prime factors of location, amenities, and size of budget. If the property invested in is for rental purposes, properties in the vicinity of commercial hubs and well connected to public amenities have a high rent-yielding capacity and help you reap profits in a short time.
5) Reputation of Developer
The fifth rule for real estate investment is to search for a Trusted and reputed developer to rely upon. Established property developers ensure to complete and deliver the project with construction, legal and quality standards within the agreed time frame. Besides assures you of the legal validity of land, property constructed and compliance with local guidelines, building plans and so on. Money vested in the trusted developer is always safe!
While there are many options in real estate investment with profitable and assured returns over time, they also come with their own set of risks. So, thorough research and familiarity with major real estate thumb rules can help you decide on options that best suit you.
