Every real estate investor, whether seasoned or a novice, will inevitably go through a learning curve when they start out. Mistakes and missteps are commonplace as you begin to learn the ropes of your trade. However, a wrong investment in real estate can have expensive and long-term consequences. To avoid buying a home that you might regret in the years to come, it’s essential that you make an informed and wise decision. Read on for some common real estate investment mistakes you can avoid to help you stay on the right track.
Before you buy a car or a new TV, you compare different models, you usually ask questions and try to determine if the product is worth its price. The due diligence that goes into buying a home should be even more rigorous. Before buying a home or investing in one, understand your family’s finances and needs. Take a good look at the neighbourhood, because remember, you aren’t just buying a house, you’re buying a location as well. Doing your research is the most critical step to real estate investment as the wrong move will result in unfavourable returns or none at all. You can’t stop at just the location and city; you need to go beyond and look into the builder’s reputation, civic amenities, capital appreciation, rental yield, resale value and so on.
After you’ve done your research, the next immediate step should be a thorough evaluation of your funds. Many investors, particularly first time home buyers, tend to move quickly with their decision without completely taking stock of their financial situation. While investing in property, there are several additional costs that many people tend to overlook including painting and maintaining costs, furnishing and monthly living expenditure. In addition, you will have to pay your home insurance, property tax and other duties payable while buying a home.
Another aspect of your finances is your CIBIL score or credit score. It is the complete history of all past credit bills and loans. Your CIBIL score plays a massive role in helping you secure a home loan, without which you will not be able to pay for your new home. A score of 750 or higher is favourable as it implies you are regular with your payments. Make sure you clear out all your debts before approaching your bank for a home loan. You can also read our blog on the complete home loan process in India to make this process hassle-free.
Without a carefully thought-through outline of your investment strategy, you won’t be able to analyse your budget and cash flow before projecting. Begin your investment journey with a realistic goal – what do you plan on achieving with your investment? This will differ from person to person depending on income, age and investment experience. Once you figure out your goals and set an achievable timeline, you will be able to successfully invest in real estate.
From houses and villas to commercial and industrial properties, there are several real estate options for us to invest in. The primary goal of real estate investment is to maximise your returns. To do so, you must choose the right kind of property. Always invest in a property that will remain in demand by the owner/occupier tenants well into the future. One way to ensure this is by looking for properties in a prime location, superior quality of construction and world-class facilities and amenities.
When you’re looking to invest in real estate, one of the most overlooked aspects is the real estate company. With a booming real estate market, India has its fair share or real estate developers. But when you begin your real estate investment journey, be vigilant when approaching builders. When investing in real estate always opt for a reputed real estate developer. A reputed builder will guarantee you a property with the highest-quality facilities, sophisticated architecture and legal constructions with all the required permits and approvals and the all-important RERA certification for transparent transactions and hassle-free handovers.
Owning or investing in property is a guaranteed way of generating income and accumulating wealth. Whether you’re a first time home buyer or a veteran investor, we hope these points have afforded you better clarity into the real estate investment process. Begin your journey today by finding your dream home at Shriram Properties. You can also read our comprehensive guide for first-time homebuyers in India for more insight into the Indian real estate market.