Real estate is one of the products that has a persistent demand across the world. It’s tangibility and durability provide a unique satisfaction in ownership unlike any other marketable item in the world. That is why a large number of people feel comfortable investing in the property market rather than on other high-return generating financial instruments. Not that alternative investment options are inferior to real estate but people are risk-averse by nature. Regardless of market type and condition, the core utility of the product remains the same, and so there are quite a few real estate tips applicable to other markets.
Location Is A Prime Factor
Among the factors determining property price, location holds a significant weight. That’s because location is an umbrella term. It comes with numerous area facilities and growth prospects that can directly impact your investment. For instance, Mirpur is a popular residential area in Dhaka because of the affordable apartment price in the locality. However, the current market scenario might change within a couple of years once the metro rail is in full motion. Not only it will increase area accessibility for residents, it will attract a new wave of buyers which will automatically cause an increase in apartment prices. Like this area, any location with a decent environment and good infrastructure will continue to outperform in the long run. That is why location factor is one of the evergreen real estate tips applicable to other markets.
Invest With A Home Loan
A common belief among people is that a home loan is a burden. In some cases, it can be, but chances are those were the results of miscalculated decisions. If you are an active investor in the market and are looking for a steep gain, then a home loan is a good way to maximize your profits. For instance, if you take a 50% loan of the property amount and finance the rest through your savings, then your leveraged position in the investment would be twice (1/.5 = 2) that of you entirely financing it on your own. Then again, it depends on the investor’s preference and profit appetite. Plus, there are multiple aspects to consider before taking on debt. The best practice, in this case, is asking questions to the mortgage lender regarding your financial position and how to utilize it in the best possible way.
The Real Estate Industry Is Cyclical
Cyclicality is among the common real estate tips applicable to other markets. The benefit of a cyclical industry is that if you are opting for a long-term investment, you are likely to enjoy a price appreciation of your property. There will be multiple ups and downs in the market but the long-term trend will be positively inclined. The reason for this is, land and shelter are limited resources and consequently, there will always be a scarcity. So, if you make an investment at a certain time, you will end up with a higher return. Hence, for real estate, it is hard to pinpoint the right or wrong time for investment.
Always Do Your Research
It is always wise to test the waters before jumping in. Yes, experts are there to help you but as an investor, it is necessary that you understand the market yourself. Apart from basic supply-demand concepts, there are a few industry dynamics such as infrastructure development, interest rates, economic conditions, and the stock market that drive the scene. You don’t need to be an expert in all of these but try to understand where the growth is and how you can make profits from this opportunity. Before investing, get an idea about the current prices in popular areas and ongoing development projects. Understand how the new generation is bringing changes into the market. A good example of one of such changes is the gradual shifting of the commercial hub of Dhaka city to the Gulshan area.
Expect A Bunch of Fees and Charges
Since the industry generates a high return, it has multiple stakeholders at different levels and all of them are trying to make a profit. That is why the deviation of the price of a property from the original construction cost is very high. Moreover, to regulate the industry and ensure safety, the government has imposed multiple conditions on transactions. For example, it is common to check the legal property documents before purchasing an estate. To do that, you will need to visit multiple government offices and pay fees just to get a copy of the documents. Furthermore, there will always be taxes on various occasions and on various possessions. So, you must consider and be prepared to bear all these costs if you are to invest in the property market. Hence, fees and charges are among those real estate tips applicable to other markets.
One last thing, trust is an important issue in the real estate market. Therefore, be selective but make sure to find a suitable agent. For any property related queries, Bproperty is always ready to help you. If you have any, please share them with us in the comments section below!
