5 Real Estate Investment Tips
November 27, 2017
Across cultures and countries, property has been one of the oldest investment types for safeguarding one’s capital, which is still favoured by young and old. Read on for 5 top tips to keep in mind when investing in real estate.
Property investment is not only the oldest, but also one of the safest forms of locking one’s liquid assets. Historically, the industry has seen a steady appreciation with periods of inflation and property boom, and just a handful of short periods of depreciation. Overall, property prices have been on the rise and have reached a point where it is beyond the means of the world’s vast majority. Rates in cities like New York and London have seen people shying away from investment and choosing to rent instead. However, with a few smart decisions, everyone can benefit from the real estate industry. Following are top tips to keep in mind when investing in property.
- Identify the purpose of your investment
Whether it’s a holiday home, family home, or a home to rent out to earn some extra cash, the first step to decide upon is the purpose you want the property to serve. Depending upon the answer, the budget and location decisions can be taken.
Property investment is one of the most significant investments that one makes in a lifetime; and to be able to earn some returns, it takes time and one needs to be patient for the prices to rise over the years as well as rent the property out to earn a steady return on investment. Hence, when you decide to buy a property, it needs significant involvement, research, planning and thought to make the investment worth your time and money.
- Identify your budget
The next most important step is to identify the amount you can and are willing to lock up into property. Since real estate is a substantial investment, it’s worth taking the time to plan your finances to know the leg room you have to invest. This decision will then define the space, quality, comfort, lifestyle, and location you can get. The rule of thumb in this industry is that a set budget can buy you a larger space in a less popular location and vice versa.
- Understand the market dynamics
Whichever type of home you’re in for, before you look into the property options available, it’s vital that you understand the market dynamics. Take your time to research via multiple sources, look into the history of property prices and rents in different locations, the most sought after areas, the inflation trend, the finance options and flexibility available, as well as the laws that govern the market. It’s also worth considering the different markets, especially emerging markets for real estate around the world to get better value for money and potentially higher returns on your investment. For example, Dubai has been topping the charts for ROI within the GCC region and has also been voted as the most popular property investment destination earlier this year; notably the city is also seeing much of foreign direct investment in the property sector due to the market scenario.
- Explore the location
Location, location, location. That is one of the defining factors for price and ROI. Explore the locations that interest you beyond a simple Google search. Spend some time in the area, experience the ease of access to the property, the transport options available, its proximity to schools, hospitals, malls and leisure destinations to understand the lifestyle that the location and property provide. You’ll be a lot more knowledgeable and mentally at ease when you know what exactly the day-to-day dynamics are of the place in which you would wish to buy a property’. Also note that different regions have different regulations. Dubai, for instance, only allows foreign nationals to own properties in designated locations, such as JLT, Dubai Marina and Business Bay. Allocate time for proper research; alternatively, you can also hire professional consultants to help you pick the right property for you and help you through the legalities.
- Deal with authorised entities only
As mentioned earlier, property is a significant investment decision, and when it comes to such a large sum of money, it goes without saying that you need to safeguard your interests as lawfully as possible with iron-clad agreements. Look at the regulatory authorities that handle real estate in your preferred city and, even if you find it boring, take the time to read the laws, know your rights, and even cross check your contract clauses for legalities. In Dubai, the RERA also has dedicated customer service that is available to answer all your queries and help you legally. It’s also noteworthy that if you’re dealing with real estate agents, they have a RERA number which makes them authorised to broker properties. Don’t be hesitant to ask them for it and even discuss every clause of the agreements they provide. It’s always advisable to be safe when investing your hard-earned money.
When it comes to property investment, the above points cover the major aspects of the process. Our advice would be to research and understand the market, the homes, as well as the regulations as much as possible before investing. We at MAG are always looking out for your interest and happiness first, because your delight with your home is the metric by which we determine our success.