5 Prime Factors that Define a Successful Real Estate InvestmentNovember 24, 2019
Real estate or property is one of the most preferred areas of investment mainly because of the attractive returns it provides. The areas to invest include residential, commercial, land and retail; and the strategies used are owning and renting, buying and selling, investing in real estate investment trusts (REITs), and so on.
Here are 5 Factors that determines a successful real estate investment –
1. Selecting Location and Project
The first step in real estate investment is selecting a location, and a project within the location to invest. The location influences the investment period too. While investment can instantly be made in developed locations, the emerging ones may need longer time for investment.
2. Conducting Careful Research
As an area filled with potential challenges, conducting a thorough and careful research is much important in real estate investment. Care must be taken to study about the developer’s track record, quality of previous projects, financial conditions, and so on.
3. Conducting Financial Analysis
Another factor that determines the success of real estate investment is getting familiarized with the tax structure, payment plans, and others. It is also important to determine your personal wealth, growth prospects and the maximum amount of loan for which you are eligible, in order to avoid financial stress.
4. Having an Exit Strategy
It is always better to exit after attaining the targeted return on investment (ROI). Though it is an existing practice to hold the properties for a longer time, sometimes delay in exit may impact the overall internal rate of return (IRR). Thus, an exit strategy is as equally important as selecting a property to buy.
5. Stay Focused
It is very important to stay focused while investing in real estate. All the other factors may be in vain if you do not keep an eye on changes in market trends and make adjustments to your plan accordingly. Time must be allocated for continuous assessment of market trends and opportunities to overcome the challenges encountered.
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