Investing in real estate can be one of the most gratifying and rewarding investments there ever could be. The above figure shows that Indians are readily investing in real estate. If you are all set to invest in real estate and excited to do so, you need to be well prepared and knowledgeable about the risks associated with it as well.
So, what exactly are the common mistakes to avoid while investing in real estate? Go through the blog to get a better understanding and idea.
The market size of real estate development in India is expected to reach $1.72 billion by 2030.
Common Mistakes to Avoid While Investing in Real Estate
1. Lacking Proper Research
Research is everything when it comes to investment. Especially with major investments like real estate, you need to be twice aware and cautious about everything. So, when you plan on investing in real estate, you need to go ahead and analyze the market trends thoroughly. Look for the various types of properties, their market value, analyze the competitors and more.
Few Things To Keep In Mind And Research While Investing In A Real Estate Property
- Purpose of your investment
- Type of the real estate property
- Land value
- Location of the property
- Property prices
- Facilities and connectivity of the property
- Authorization and approval of the property.
- Rental value and demand and more
The property you invest in can’t lack depth. You have to have a neat and thorough idea of the property you are investing in. Do not let even small details slip, and make a compact plan for your investment.
2. Not Considering The Location
Location is a major factor when it comes to investing in a real estate property. One of the most major mistakes to avoid while investing in real estate property is not taking the location into serious consideration.
A Good Real Estate Location Should Hold The Following Features
- Prime location with a good cost of living and land value.
- Availability of basic amenities like water supply and electricity.
- Easy access and good connectivity to important locations.
- Great public transportation facilities
- Availability of good healthcare and educational facilities.
Most people compromise on the location of a place if it costs lesser. This is one of the major mistakes to avoid while investing in real estate property. You might as well choose a good real estate property with the best facilities and resale value than pick a real estate property that is cheaper with numerous loopholes.
3. Neglecting The Reputation Of The Realtors/Builders
This is one of the most important things to keep in mind when planning to invest in real estate. Real estate brands and builders are the backbone of good real estate property and help in investing in one. So, when you seek a real estate brand for getting a property, it is essential to know that they are well known and have a good reputation and brand name in the market.
If it is a property under construction, then it is essential to see that the property project is registered under RERA. It is also essential that the project is CMDA-approved. Make sure that you keep in mind that not taking notice of the real estate brands you seek out is one of the important mistakes to avoid while investing in real estate.
4. Not Having An Idea Of Which Type Of Real Estate Property To Invest In
When you intend on purchasing a real estate property, it is of utmost importance for you to have a clear clarity of what kind of property you would like to get as an investment. If you are looking to build something of your own, then obviously, a land would serve you well.
If you are looking for monthly returns out of your property, then you should invest in commercial real estate properties. If you are looking for a dream home, then go ahead and look for residential properties in a prime location which will provide you with a good return on investments and resale value in the longer run.
One of the biggest mistakes to avoid while investing in real estate is not having an idea of the purpose of investment and the outcomes you expect from it.
5. Having A Loose Plan For Financing
The biggest mistake to avoid while investing in real estate is to avoid miscalculating your finances. In getting a real estate property, most often, investors do the mistake of only thinking about the value of the property. But there are many things that go into investing in real estate.
There are numerous other charges like
- Property Registration charges
- Paperwork charges
- Maintenance costs
- Repair costs
- Utility costs
Keep the above things in mind while planning your finances in making a real estate investment. If you are availing loan to invest in real estate, then your cibil score and credit score should be clear. A credit score of 700 and above is a good enough indicator to avail of a loan easily. See that you maintain all your track records well to get a loan.
6. Lacking Proper Paperwork
The next common mistake to avoid while investing in real estate is nothing but not having structured paperwork. Paperwork needs to be on point to have a smooth registration process and handover of the property. Investing in good and strong paperwork is the best way to make the right.
Below Are A Few Needed Legal Documents For Buying A Property According To Hindu
- Agreement to sell
- Absolute sale deed
- Title deed
- Power of Attorney
- Receipt of property tax
- Encumbrance certificate
- Occupancy certificate
- Non-objection certificate
- Bank loan statement
7. Not Setting Objectives For Your Investment / The Return Of Investments
Don’t invest just for the sake of it. Have a proper plan in hand. When you plan to get a property, analyze well on the cost of living of the area. Thereby, also prepare and get a good idea about the return of investment of the property.
According to ET Money, the average 10-year return on real estate investment has been 10 percent.
Understand the clear market position, and analyze the market trends and market value of the property before moving ahead and getting a property. The above blog is a brief of the common mistakes to avoid while investing in real estate. If you are looking for investing in real estate, then make sure you keep in mind the above things.
Home prices are on the rise! Buy now or never!
Owing to the surge in construction costs, home prices are on the rise and are likely to see an increase of Rs. 400 – Rs. 600 per sq. ft. Backing this, The Hindu also reported that the ‘mean’ construction cost rose to 10% – 12% in just one year. So, delay no more! Get to work NOW if you are looking to make an investment in residential property!
If you want to avoid making mistakes and want to invest in a real estate property that you think would provide you with the best results in terms of the property of value and return on investments, then you should check out GK Shetty’s projects. All projects of GK Shetty are registered under RERA and are CMDA approved.