Real estate investment is one of the most thriving industries not only in Karachi but on a Global apex. Hundreds and thousands of people are involved in it for the right reason.
What’s the most crucial item to look for in real estate? While the location is always an important consideration, there are various other criteria that assist decide whether an investment is good for you. Here’s a look at some of the most crucial things to consider if you want to invest in the real estate market.
According to Suze Orman:
“Owning a home is a keystone to wealth.”
It’s a proven hypothesis that owning real estate will help you build a better business portfolio and a solid stream of income if accommodated. However, not everything turned out as planned.
One shouldn’t be blinded by the rewards it has to offer. Many people in Pakistan have lost fortunes by choosing herd mentality over common sense. Real estate investment is a simple game but indeed not an easy one. Here are the top six things to consider before investing in real estate.
1. Location of The Property
Anything that matters most when looking for a new real estate is its whereabouts. The location, which looks pleasant and lavish today, might be affected due to the proximity of the manufacturing industry in the near future.
Ask the local councils and government agencies about the future planning of your interested area to get first-hand knowledge that will support your future investments. Also, you will get additional information that might compel you to make more investments (in the area) if you want.
One more thing to consider is to invest in residential areas. There are many benefits of choosing residential areas over commercial areas. The residential property can be used as a source of stable rental income, and after some time, you can also remodel it and auction it for higher prices.
2. Credibility And Customer Base
Before making any investment, try to connect with the residents and locals. They will provide you with valuable information that will help in making decisions. If you’re going into the business with the (real estate) company, then you should demand a company’s portfolio.
If the portfolio isn’t enough for you, then reach out to the company’s official social media pages and read reviews there. Those reviews provide accurate details and knowledge about the clients who had experienced the service.
However, the crux of the talk is you shouldn’t choose a company as your investment planner that doesn’t have an excellent credit score or a bad reputation. Hence, research is necessary.
3. Investment Horizon And Motivation
As a real estate investor, you should have the motivation behind your investment. If you don’t have it, you have to pay the price for it. Mostly in terms of lousy management of mortgages. There are primarily four horizons and purposes of why you’re investing in real estate:
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- For your usage: This would provide you to have your own space of accommodation, and you can personalize it in your own way. If maintained precisely, you will get value appreciation on your investment.
- For rental purposes: It’s a good idea to buy and lease your property. However, there are a few points that one should consider before making such decisions like managing tenants, taking care of the property, legal issues, etc. If you can handle these chores, you’re good to go.
- Buy and sell (for short-term): Here, you can purchase property while its in under construction and would sell it for a higher value after completion.
- Buy and sell (for long-term): Here, you can purchase property when it’s in the early stages of construction. This might work as a (complete) development project that is going on along with other projects such as houses, homes, offices, commercial cities, etc. So, your investment will depend on various factors and will return a huge sum of capital.
Therefore, it’s essential to determine your investment plans and horizons before going into the business.
4. Property Planning And Valuation:
Before going all in, take a step back and try to make a plan for property purchasing and valuation. It will also help you add proper tools to your arsenal and thus creating an enormous impact once you step into the industry.
Property planning includes:
- Taxation.
- Insurance of your property.
- Listing price and investments.
- Investment analysis, etc.
However, there are other methods to judge what is going on within the property market for a more in-depth approach. You can use sales comparison analysis to judge if the property’s value is appreciated or depreciated. It will update your knowledge of your property and the market and make you risk aversive.
5. Installment Plans And Down Payment
Before throwing your money into a competitive real estate investment market, you should analyze the contract you’re having with the property dealer. As we said earlier, the real estate business isn’t just about boons and happy endings; many people have lost money because of low financial vocabulary and harmful agents.
It’s your responsibility to search for better people and organizations to carry out operations in a legalized and flexible manner. Only this one can make their investments safer and plan for the long term.
6. Transparency
Transparency and trust come first when you’re doing business with people. You mustn’t perform any illegal way of doing things. If you do that, you’re preparing yourself for the long term. And if this affects your credit rating, your chances of having easy mortgages will be meager in the near future.
Similarly, it’s your job to choose the right people with you to work for your business. Ensure they follow the right, legal, and industry-accepted procedures and values.
Getting into real estate might sound challenging and boring for new players. But believe me, if you follow along and meet with the right people, you will love this more than anything.
If you’re willing to get the best investment in Karachi, these are the things that you must consider before making the investment decision.
