Real Estate remains the safest and most lucrative investment opportunity available today. It also tops the list of the most preferred investment choices.
But, despite the favorable opinions of financial gurus, people can still incur losses. And why is that so?
The answer lies in the hasty decisions people make. Smart investments need smart choices; intelligent real estate investors don’t buy any and every property.
They do a thorough analysis, weigh the pros and cons, ask questions, understand market trends before signing on the dotted line.
You don’t need good fortune to make money from real estate investments; you need a foolproof plan on how to go about it.
Let’s get you acquainted with the top five mistakes that could drive a spoke in your investment goals.
Common Real Estate Investing Mistakes you Should Avoid:
1. Failing To Research.
Research does not imply viewing several projects before homing in on something that fancies your liking.
Research involves aspects that would eventually decide the true worth of your investment. Fact-finding is a crucial element for a safe real estate investment, so get down to the details.
Get all details of the property that interests you, and have someone knowledgeable check them for you. What do you need to check? Here is a list to get you started -
- Builder’s history
- Previous ownership
- Sale Deed
- Khata Certificate
- Power of Attorney
- Construction Plan
- Sale Agreement
- Tax Receipts
- Encumbrance Certificate
- Title Report
- NOC from Bank
- Building Approval Certificate
- Completion/Occupancy Certificate
- Latest Tax Payment Receipts
- No Objection Certificate
- Utility Bills
- Share Certificate
- Mother Deed
- Building Type
- Fire License
It is essential to have a lawyer examine the documents to avoid unnecessary problems later and ensure you make a good investment.
Invest only when you receive the all-clear signal from the lawyer. There have been instances where the property was under dispute, or the builder did not have the requisite clearances.
Remember the Maradu Apartments debacle. You don’t want to find yourself embroiled in legal hassles and lose your property.
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2. Ignoring the Builder’s Credentials
There are several Real Estate Builders, but they are all not comparable. Some builders have completed several projects, won various awards and recognition for their work.
Their constructions are landmarks in the city. Others do not have that great a reputation. Choosing a project of just any builder as an investment could be your biggest blunder.
Go for a project developed by a trusted and reputed real estate developer, for that will secure your investment.
Reputed builders have a reputation to maintain, so they do not take shortcuts. Their projects are sound, as they ensure they have all the permits and paperwork in order.
Their projects offer complete transparency and are RERA-approved.
Furthermore, with a renowned builder, you can rest assured that they will complete the project on time and that the construction will be of the finest quality.
3. Study The Market
Buying a property because someone tells you it is a good investment is not wise.
Don’t be influenced by others; resist the temptation. Instead, list out the things you want and check them against what the project offers.
- What kind of property are you looking for?
- Do you want a villa or an apartment?
- Are you looking for immediate returns?
- How much money will you like to invest?
- What is your purchase plan—self-financed or loan?
- What size of property are you interested in?
Make your list before beginning your search. These questions are relevant because they decide your investment goal.
If you are looking for immediate returns, then your preference should be ready to occupy properties.
And, it should be in a locality where there is a demand for rentals. Base your investment based on market trends.
Go for a property that is built in a developed area with social infrastructure.
4. Ignoring Warning Signs
People often become so enamored by the property they like that they fail to notice signs that could bring down its value.
Prudent investors consider all aspects before putting their money into real estate. Things that should raise a red flag are -
- Is the property adjacent to a factory or a railway line, or the highway? Pollution (air and sound) could become a cause for concern.
- Is the property near a dumping ground? The disgusting odor, hygiene issues, and health hazards could be a nuisance.
- Is the property built in a low-lying area? Heavy rains could cause waterlogging and mosquito problems.
- Do you notice termites in the surrounding area? They will find their way to your home one day.
5. Is the Locality Liveable?
The housing complex in which the apartment is located may have all the right amenities, which could be the selling point.
But, what of the immediate surrounding? Is that safe and inhabitable? If you are buying property to let it out, look for a place in a liveable area.
If the locality has a high crime rate or if moving around alone could pose a risk, then a property in such a place would make a risky investment.
Invest in a property located close to schools and medical facilities and one that offers good connectivity. Safety should be high on the list of priorities.
The Bottom Line
Real estate investments are profitable, so go for it. However, be judicious, weigh the pros and cons before investing.
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