Thursday, 1 November 2012

How to invest in real estate to make profit?

Investment in real estate is a wise decision. If you do it carefully you can make a good profit out of it. Price of land will never go down if other things are remaining the same. Only if there is any misshapenness such as big natural calamities etc., may reduce the price of land. If you purchase Land or house property in a convenient place the price will definitely go up within a few years. Investment in real estate will make you rich if you selected the right one in right time.

Investment in real estate brings you double edged benefit. An investment in house property earns you rent every month and appreciation of the value of the property. Rent is a regular income which is helpful to get back the interest on the loan you have taken for the house or the interest of the amount you paid for the house. Investment in real estateSuppose you bought a house property for Rs. 25, 00,000   which earns you a monthly rent of Rs. 12500 which gives you Rs. 150000 in a year. After a few years you could sell it with Rs. 40, 00,000 which fetch you a profit of Rs. 15, 00,000. Suppose you sold it after 5 years you an average profit of Rs. 3, 00,000 per year, in addition to the rent of Rs, 150000. So you got Rs. 4, 50,000 every year till you sold it for an investment of Rs. 25, 00,000, an average income of 18% per year. You will not get this much income, if you invest in any financial instruments other than some high profitable shares or mutual funds.

Things you keep in mind to get a good profit from real estate. If you keep the following points mind you can harvest a good profit from your real estate investment.

Invest in property after careful investigation. You must make careful enquiries to select a real estate. If the property you purchase in a good location with the nearness of schools, colleges, hospitals, places of worship, market , metro station etc. you will get a good rent and good resale value. People wish to buy houses in such a location and the resale will be easy and profitable.

Buy houses from reputed builders. Reliable reputed builders never build week infrastructures and invalid constructions. You will have a good strong structure and can earn a good resale value due to the construction of reputed branded builders.

Buy house property in developing location. In a developed location the value of property becomes stable and will increase only at a low rate. But in developing locations or cities the value of house property will be doubled or tripled in a short period of time.

Purchase property with clear title. If you purchase a real estate in a good location, but the title is not clear, you may face problems. So always buy property with clear title without any encumbrances. Better you get the advice of a good professional advocate and do not consider the professional fee you paid to him is a loss. Or you purchase property with a loan taken from a reputed bank. The bank people will verify all the documents by their panel advocates and sanction the loan only after clearing all issues, if any. If you have enough money you can pay back the loan immediately after getting the documentation and procession.

Invest in property with definite financial goals. IF you buy real estate as investment purpose, you must fix your financial goals which should be satisfied with this investment. One of my friends bought a house property in a faraway city and I asked them that would they stay there. But he told me that this is an investment  for  the higher education of his son. He has a definite goal behind this investment.

Invest with patience. Every investment must have some discipline. You must not invest here and there. Locate any special area and do not be in a hurry. Wait with patience and invest with much care and patience.

If you handle with care real estate investment is a profitable one and you can achieve your financial goals easily.

Enhanced by Zemanta

1 comment :