Real Estate Investment: Making Informed Decisions

Investing in real estate can be a lucrative venture, but it requires informed, intelligent decisions rather than following your instincts or emotions. To be successful in real estate investment, you need to establish your budget, list your key essentials, research the market, and understand market trends.

Knowing What You Want

Before making a real estate investment, it is crucial to establish your budget. Whether you are buying with a mortgage or cash, for living in, or renting for investment purposes, your purchase should be affordable.

Once you have established your budget, you should list your key essentials, such as the number of bedrooms, and proximity to schools, work, shops, and the countryside, which you are not ready to compromise.

Additionally, consider your family life cycle and its needs to find the right type of property, such as an apartment, ready home, or plan.

Discover More About Your Location

To make a sound investment, research the location thoroughly. Find a Knowledge Partner who understands real estate and the area you’re looking in well.

They can guide you in making informed decisions regarding contracts, taxes, etc. Determine your objectives, and time frame for moving in, and plan for reselling.

Research – Gathering Data

Once you have established your criteria, go out and research the market to make a list of options that best suit you. Ask questions, visit the site, examine the local market, and gather essential data to create a fact sheet for each option.

This includes the median price per square foot, the number and total value of sales at the location, and current and future property supply.

You should also study the price per square foot and overall property cost for the last 5 transactions at the location. Finally, compare the price being quoted with that data to establish whether the offer represents good value.

Know the Market Trends – When to Buy

The real estate market fluctuates, and buying (or selling) at the right time can make a huge difference to the price you pay and the return on your investment.

The right time to buy is when the market is depressed and sellers are making better price offers. Avoid buying in a boom phase of the market cycle as you will end up paying more.

Finalizing the Deal

Before completing any deal, make sure that the contract covers everything from any maintenance, repairs, etc., to the exchange of keys.

Consult your Knowledge Partner at every stage and have them negotiate the deal for you. Before completion, also consult a property law and tax expert, who can cover everything. Finally, when you have arrived at the ‘best price,’ don’t hesitate to make the purchase or you might lose it.