Real estate is considered to be one of the most commonly and widely practiced investment opportunities across the globe. According to statistics, real estate appreciates at the rate of 3% to 5% every year. It means,if the price of your property is around $50,000 today, it can easily be sold at $52,500 next year. In short, for every dollar spent today, you will earn $1.05 (with 5% appreciation) next year, that too without doing anything in general.
This is cool, right?
All you have to do is invest intelligently and strategically in a property and wait for the prices to go up. However, this process is not that simple. No doubt, theincreasing growth rate trend makes real estate a great investment opportunity. However, before purchasing any real estate property, it should also be kept in mind that the real estate industry is dynamic. Yes, the returns are high but these returns come with risks.
There are many incidents around us where people suffered because of property fraud. People scam others and take away all their life’s savings. There have been multiple cases of identity theft as well where people sold properties under fake identities.
To keep yourself safe and away from scams, you need to consider some important things.
To know about things you need to consider before investing in real estate, keep on reading!
Security is always excessive until it’s not enough.
Security is the most important thing to consider when you are looking for a real estate investment. A secure investment will not only prove to be fruitful in the future, but it will also give you peace of mind because you will know that your money is safe.
To get a secure piece of property, do your research. Scan the newspapers, google properties, visit government sites and try to get as much knowledge as you can.
Try to get a hold of market trends and how real estate works in recent times. Use online calculators to calculate the net future value of the investment and other costs related to the purchase. Also, try to ask around as well. Sometimes people around you may also give you valuable insights.
- Rate of return on the investment:
The rate of return is the amount of money that you are getting on your initial investment. If your ROI is positive, it means that you are good to go because your property is generating extra money for you.
Always, ask for average ROI before investing in any property because this is the most powerful thing about the investment. According to experts, the ROI rate of more than 10% means, it is a good investment.
- Future goals:
Always map out your future goals before investing. Where do you want to see yourself in the near future? What do you want to achieve from your investment?
Also, consider the overall environment and ambiance of the place as well. Consider the future prospects of the place. For instance, if you’re looking to sell a house in Islamabad, it’s important to know if it’s the right time to sell which can be done by looking at the recent property trends in the local market. For instance after doing necessary research, you’ll find, investment in the capital city will be a secure and good option because the land prices of the region are increasing by leaps and bounds.
Islamabad has also ranked very high on the human development index (HDI). It means that the basic amenities of life including good quality of life, basic infrastructure, safety, health, and education and vice versa are easily accessible in the area.
- Consider all the expenses:
When you are buying a property, there are many costs associated with it. You are not only paying the property price, but you are also paying the indirect costs. Some of the costs associated with real estate are:
- Down payment.
- Closing costs.
- Survey costs.
- Inspection costs.
- Mortgage payments.
- Property taxes.
- Homeowners and hazard insurance
- Mortgage insurance.
- Costs associated with legality (verification of documents, contract, etc)
Do not overlook these costs. People usually focus on the property costs alone whereas, in reality, the indirect costs may cost you a lot as well. Many societies charge you hefty amounts for maintenance and utilities.
So, these were some of the things that you need to consider before purchasing any real estate property in your region. Remember, always make sure that your money is in safe hands. Do your research, take your time and then make informed decisions.