India is one of the most attractive destinations for real estate investments. Real Estate industry in India has reached a culmination point ever since, the gates were opened to the foreign investors. With new homes being built in almost every location, developers are competing for your money with attractive offers or offering incentives on property buying. Following are some common mistakes in real estate investment that investors make.
Not Planning before Investment: Lack of a plan is the biggest mistake that investors often make in real estate investment. They look real estate as a transaction and buy a property that sounds good deal. They buy a house or flat and then try to figure out what next. Real estate investments need planning first and then go for right property that meets your criteria.
No trust in realtors: This is common mistake by first time property buyers or investors who think their real estate agents are just agents of seller. One point that people often do not get into consideration will be the importance of Realtor inside the whole acquiring process of any real estate house. Realtors can supply you very good suggestions as to what actions or components that you may possibly need to take so as to steer clear of any legal impediments or conflicts later on. Property buying or real estate investment is a team work where real-estate agent, an appraiser, a home inspector, a closing attorney, a lender etc has to play as a team for helping investor. Trusting real estate agent is vital for smooth dealing. First-time investors should find a real-estate agent who can help you to locate promising properties.
Fixed set of ideas: It is one of the common mistakes by investors. They often have a fixed set of ideas as to what they wish to do with the property. If you cannot find a good seller immediately or not able to find property that meets your criteria, you need to wait for one or more months than buying a wrong property in hurry.
Location: If you are buying a property for selling in future or renting out, location plays vital role. If it is near public transportation, shopping malls or other amenities, it will attract renters, as well as potential buyers. Homes in high-rent or highly populated areas are ideal for real estate investment.
Money matters: Talk to your financial advisor and also work with your bank on the loan amount before you finalize your purchase. Even if you plan to rent out the property, count on paying the mortgage whenever there’s a vacancy. Even if you are planning to fix up a home and sell it, you may end up holding onto it for several months in the current market. A thorough study of market trends will also help you forecast the growth rate of your property.
Paying more than what it is worth for: Most of the times, investors do not do proper research to find out the exact value of the property. This is a common problem that often investors make at the beginning of their career. Due to mistakes in the analysis, the investor pays too much and then is surprised later when he doesn’t make any money.
If your strategy is to buy, hold and rent out properties, you need sufficient cash flow to cover maintenance. Sometimes, new investors are buying property just based on the idea that the property is going to appreciate. Not purchasing adequate insurance coverage or purchasing less coverage than what is required is one of the common mistakes.
You have to be smart, willing to work, and you have to understand your risk tolerance. It is important to think things through before you put money into a property. Real state sector is not a jackpot or gambling business. It requires a good planning and understanding of real estate trend in your city or neighborhood. Your plan should cover all the factors that are necessary to reach an informed decision.
Not Planning before Investment: Lack of a plan is the biggest mistake that investors often make in real estate investment. They look real estate as a transaction and buy a property that sounds good deal. They buy a house or flat and then try to figure out what next. Real estate investments need planning first and then go for right property that meets your criteria.
No trust in realtors: This is common mistake by first time property buyers or investors who think their real estate agents are just agents of seller. One point that people often do not get into consideration will be the importance of Realtor inside the whole acquiring process of any real estate house. Realtors can supply you very good suggestions as to what actions or components that you may possibly need to take so as to steer clear of any legal impediments or conflicts later on. Property buying or real estate investment is a team work where real-estate agent, an appraiser, a home inspector, a closing attorney, a lender etc has to play as a team for helping investor. Trusting real estate agent is vital for smooth dealing. First-time investors should find a real-estate agent who can help you to locate promising properties.
Fixed set of ideas: It is one of the common mistakes by investors. They often have a fixed set of ideas as to what they wish to do with the property. If you cannot find a good seller immediately or not able to find property that meets your criteria, you need to wait for one or more months than buying a wrong property in hurry.
Location: If you are buying a property for selling in future or renting out, location plays vital role. If it is near public transportation, shopping malls or other amenities, it will attract renters, as well as potential buyers. Homes in high-rent or highly populated areas are ideal for real estate investment.
Money matters: Talk to your financial advisor and also work with your bank on the loan amount before you finalize your purchase. Even if you plan to rent out the property, count on paying the mortgage whenever there’s a vacancy. Even if you are planning to fix up a home and sell it, you may end up holding onto it for several months in the current market. A thorough study of market trends will also help you forecast the growth rate of your property.
Paying more than what it is worth for: Most of the times, investors do not do proper research to find out the exact value of the property. This is a common problem that often investors make at the beginning of their career. Due to mistakes in the analysis, the investor pays too much and then is surprised later when he doesn’t make any money.
If your strategy is to buy, hold and rent out properties, you need sufficient cash flow to cover maintenance. Sometimes, new investors are buying property just based on the idea that the property is going to appreciate. Not purchasing adequate insurance coverage or purchasing less coverage than what is required is one of the common mistakes.
You have to be smart, willing to work, and you have to understand your risk tolerance. It is important to think things through before you put money into a property. Real state sector is not a jackpot or gambling business. It requires a good planning and understanding of real estate trend in your city or neighborhood. Your plan should cover all the factors that are necessary to reach an informed decision.
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