5 Facts To Know Before Investing In Real Estate

5 Facts To Know Before Investing In Real Estate

Down the ages, the craving to become independent has only grown stronger than anything else among human beings. At the bottom, we don’t like being at the mercy of others for our peace and happiness. That’s why investment is the thing that matters the most in the modern world as it secures your freedom and happiness in life. 

Well, they say the safest bet in the world of investment is to invest in real estate because not only your money grows here, but you enjoy a lot of tax benefits. Nonetheless, finding the right property for investing in real estate in Mumbai is easier said than done. A minor mistake can cost you lakhs and you won’t be able to do anything about it. Hence, if you are searching for real estate investment opportunities, make sure to check out these facts before arriving at any conclusion.

Location

The proverb “location, location, location” continues to be a dominant factor in influencing almost every real estate investment decision in the contemporary world. Besides, the key to considering a residential property in Mumbai should be based on how the area is anticipated to evolve over the investment period. There is no warranty that a peaceful land behind a residential apartment could one day become a noisy manufacturing facility over time. Therefore, it is advisable to review the ownership and the projected purpose of the nearby areas when you are thinking of investing. Besides, one should always take into account the closeness to transport hubs, markets, warehouses, hospitals, education institutions before coming to any conclusion.

Valuation of the Property

Property valuation is another major factor that plays a significant role when investing in residential projects in Mumbai. It’s imperative for financing when buying, investment analysis, listing price, insurance, and taxation because they all depend on real estate valuation. The most popular used methods of real estate valuation are given below:

  • Comparing sales of recent properties with similar aspects
  • The expense of land and construction minus the depreciation value.
  • Expected cash inflows from rentals. 

Investment Purpose and Investment Landscape

Clarity of purpose is an essential factor that shouldn’t be overlooked due to the low liquidity and high-value investment in real estate. Ignoring it may lead to unexpected financial distress, particularly when the investment is mortgaged. In that case, ensure you’re identifying the wide categories which meet your goals.

  • Buy and self-use
  • Buy and lease
  • Buy and sell(long-term)
  • Buy and sell(short-term)

Profit Opportunities

Profit opportunities like cash flow is the amount of money left after expenses. Without a doubt, a positive cash flow is the main factor that ensures a good rate of return from an investment property. Here, it is advisable to create projections for the given below channels of profit and expenses:

  • An anticipated increase in intrinsic value because of long-term price appreciation.
  • Advantages of depreciation
  • Anticipated cash flow from rental income
  • Cost-benefit assessment of mortgaged loans vs. value appreciation
  • Cost-benefit assessment of renovation prior sale to get a better price

The bottom line is investing in residential flats in Mumbai is a lucrative opportunity that can diversify your portfolio. Besides, real estate has a low correlation with other main asset categories. What’s more, it can provide a steady cash flow, tax exemptions, and substantial appreciation, making it a quality investment possibility. Nevertheless, like any other investment opportunity, it’s significant to consider particular components, like the ones discussed here, to make a confident investment decision that will make you financially independent in the years ahead. 

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By sardardanish

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