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Selecting the right real estate investment

Scientists and innovators are looking at possible solutions to colonize our neighbouring planet: Mars. But until that becomes a reality, a plot of land here will remain valuable and be a great opportunity for people to invest.

It isn’t that simple though. You can’t simply buy land that you lay your eyes on. Not all plots of land appreciate equally. For instance, a property in Dehradun is likely to appreciate more than a plot of land in a hamlet situated 200 kilometres from Delhi -- at least not yet. A good real estate investment depends on a lot of factors. They all have to come in place for the investment to reap you benefits.
So, here are some tips to help you make the right real estate investment.

1) Do your homework
You need to ask yourself what type of property you wish to buy? Do you want to purchase a building and rent it out or do you want to develop the property and sell it again (flipping for profit)? The answers to these questions can help you make your investment decision easier. Also, it is very important to talk to people. Speak to different real estate agents and locals so that you can get different options to consider. You can also do a bit of online research regarding property prices and rents in a particular area to gain a better understanding.

2) Location, location, location
In one way, real estate investment is quite similar to watching a cricket match. It is all about getting the best seats possible. Any expert in this field cannot stress enough about the importance of location when it comes to real estate investment.
As the investor, you need to find the best possible location for your budget. For instance, if you are investing in a residential property, it should be in an area that is close to all basic amenities like schools, hospitals and transportation.

3) Personally inspect the property
A real estate investment requires you to be a hands-on investor. Since you are going to put down a considerable amount of money, you need to ensure that you are getting a good product. Personally go and inspect the property at the location. Check if the property has any flaws in the design or the structure. You don’t want to end up with unnecessary costs once you buy the property.

4) Understand the market
Warren Buffett says: Buy low, sell high. He may be talking to investments in the stock market but he could as well be referring to real estate investments. Investing in real estate is a bit like investing in the stock market. The best way to maximize your returns is to identify properties at attractive prices. Don’t chase the market when it is performing extremely well. Instead, it is better to pick winners when the real estate market is at lower levels.

5) Find out all the expenses
There can be a lot of expenses when you get down to the actual process of buying a property. This includes: registration fees, utility fees, maintenance deposit and so on. All these charges can get pretty expensive when the numbers add up. That’s why you need to make sure that you include all these different factors into your budget before investing. You don’t want to come to a realisation later on that you cannot afford the property.

Real estate offers investors an exciting opportunity to invest in properties and increase their wealth over time. However, not all investments may be profitable. By following the above guidelines, it is possible to select a property that offers you good returns over a period of time.


Disclaimer: Investment in securities market / Mutual Funds are subject to market risks, read all the related documents carefully before investing.