If someone is looking for low - risk and secured investment which offers good potential in the long run, then property investment would be the right choice. Investment in real estate tends to be less volatile than other investment avenues. Monetary triumph is achievable to quite an extent by investing in real estate sector. This is a most privileged way for higher returns. From ages, investment properties lend a hand to many people in making wealth in short as well as long term. In the long - term, capital grows as the worth of the property grows along with the regular incomes through renting investment property and also enjoying the tax benefits.
Short - term investments are made to make quick returns which are very much risky. Those who do such investments are known as investment speculators. Investments with the time horizon of more than five years are known as long - term. These types of investments are done by pre planners with an objective of buying a property at low rates and then sell it off at a higher rate. This is possible only if the investor is assured about what is going to happen to its investment after a few years.
How to Achieve good Return From Real Estate Investments?
An ideal investment property is one which offers a capital appreciation of minimum 10 percent per annum. So, if you are investing in real estate to fetch good returns, then you need to concentrate on the location of the property. Return on investment in real - estate is directly proportionate to the location of the property. Hence, before purchasing the property, one should very particular about its locality. Few points of consideration at the time of investment in real - estate are as follows:
Point 1- Invest in a growing area: Always invest in a growing location not in already established areas. For a middle class person with mediocre income, cost of property in established area is very high and mostly out of reach. If you want to purchase property in established area, then you need to compromise it with a small sized property. Secondly, the rise in the value of the property in pre established location is lower in comparison to the growing area. The cause remains in the nature of the real estate market. The prime or established areas reaches their worth over a definite phase of time afterwards it becomes stagnant.
Point 2- The property should have general amenities for value addition: If the property has general amenities in the nearby area, then it adds a great value to the worth of such property. For example, if the property has shopping complex, multiplex or other general amenities like swimming pool, open area, parks & playgrounds for kids, then everyone gets easily attracted, which in turn increases the value of your investment. If the property does not have such facilities, it should have a scope of such expansion plan. The possibility of better extension plan is more in the growing areas because its location is generally not overcrowded and have ample space for such amenities. Most of the upcoming real - estate projects have all these facilities with their projects to lure more and more investors.
Point 3- The property should have easy access to the public transport: Property should have well connected to the public transport as it is highly considered when someone is looking for a residence with rental or purchase option. Everyone has to travel for accomplishing everyday needs and a middle class family cannot afford higher petrol expenses for it. It is always ideal if the property and markets are nearby. Meanwhile, connectivity to public transport gives an added advantage to the property. For Example, in Delhi, people are checking the connectivity of property with metro rail facility because it has proved to be one of the most convenient type of public transport. So, an area which is near to the metro station is already double in worth in comparison to the area which is not connected to the metro. In this way, connectivity to public transport increases the return on your investment.
Point 4- Availability of Schools & Hospitals in nearby areas: Before investing in real - estate, always check the availability of hospitals & schools in the nearby areas. Anyone, who decides to live there would seek such basic facility. So, they will need a nearby school & hospitals. An area having reputed global / international schools and super specialty hospitals will have good worth and they can provide a good return on investment.
Point 5- Has scope for business & companies: Always keep your eyes and ears open in the area where large companies or corporate are relocating or already exist. If not, at least they need to have space to expand and its employees' needs residential space. If this happens, the value of real - estate rises in that area for housing of the employees.
If these tips are taken under consideration, then investors can get a good return on investments. These are just 5 basic points of consideration at the time of making investment in real - estate, however you should also take into account other relevant criteria while finalizing the deal.
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Aruna Sharma [ MBA HR ]
Asst Manager Human Resources
aruna@aerosoft.in
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