Real estate investing is less volatile than other investment products. Such investment has offered good returns to many investors both in the short as well as the long-term. Investors are also able to earn periodic income through rent. Property investing offers tax benefits making this an excellent avenue to earn a higher return on initial investment.
An ideal real estate investment provides at least 10% annual capital appreciation. Here are five points individuals must consider for earning good returns on their property investments.
1. Invest in developing areas
It is recommended that investors look for growth areas instead of investing in established locations. Generally, the property prices in established areas are higher and out of reach for the middle-class investor. If a person still wants to buy a property in such a location, it is advisable to settle for a smaller place or opt for a housing loan. Additionally, the potential price increase in growth areas is more than established locations and offers better returns.
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2. Purchase real estate that has amenities
When an investor buys a property in close vicinity to amenities like swimming pools, playgrounds and parks, shopping complexes, and multiplexes, getting a higher return and more rent is likely. If there are extension plans to include amenities near a property, it is still advisable to invest in it. In most cities, upcoming projects offer several amenities to lure more investors.
3. Property must be well-connected through public transportation
Buying a property that is connected and easily accessible using public transportation is recommended. Almost every person needs to travel to work; however, not everyone drives a car. Investing in a property that is close to public transport, such as metros or railways will provide better income through higher rent.
4. Must have schools and hospitals nearby
Opting to invest in a property that is located close to basic facilities like schools and hospitals is advisable. Although the prices of such properties may be higher, the rental income will also be more than other locations. In case an individual does not have the required funds, applying for home loan is a good idea as they are easily available from most financial institutions in the nation.
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5. Potential scope for commercial enterprises
Investors must be aware of possible locations where large corporations may consider relocating or are already established. In such cases, the companies have the need for additional residential space to meet their employees’ requirements. Therefore, the prices for properties in these locations may increase.
Several individuals opt for a home loan to fund their property purchase. It is important that individuals check their financial situation before making a decision about which property to invest in. It is also important to consider the home loan interest rates and other charges, such as processing fees and legal expenses. However, by keeping in mind these pointers and investing accordingly, property investments will give great returns.