Making an investment in the real estate sector is one of the most crucial decisions of an individual’s life. Choosing the right time to buy the right property can prove to be a challenge, especially if someone is buying an apartment or making any sort of real estate investment for the first time. It takes all types of steps, formalities and requirements to finally reach the end stage of buying a property. One should follow certain steps and assess the right factors involved in identifying the right time to lay out money on real estate. This article will rundown on how you can figure out the right time to invest in residential real estate.
Are you financially stable?
A real estate investment is a lifetime decision and deciding the right time to invest in residential real estate can prove to be pivotal. When you consider buying a home, the most important factor to consider is your financial condition. Afterall, it is not feasible to invest all your money behind a property and not have any left over to manage a regular life.
If taking a loan seems required, you should first take a good look at your daily expenses, starting from house rent, car expenses, utility bills, children’s expenses, other kinds of savings and so on. On the contrary, if you have enough cash reserves and do not even require to take any form of loans from banks that would be a great idea as it will save you from the hassle of paying installments.
A lot of people have a perception that age limits the tendency to invest in real estate. For many, financial stability comes more into play when someone decides to invest in real estate. Regardless of the age, old or young, if someone can afford buying a new apartment while ensuring an extra cash reserve, they should step forward and make the investment without further hesitation.
Choosing the right property
The selection process of a property is a major attribute which will guide you in determining the right time to invest in residential real estate. Deciding on the right property can be a dilemma, given the number of options to choose from. There will be several plots of various sizes and price ranges. Other than that you may also have to select from the ready apartments to the ones which are going through construction. Your criteria list should also include the location and the neighborhood of the apartments. These are important factors as eventually these will lead you to a life you will be settling for.
You cannot invest blindly and should complete your due diligence when it comes to buying an apartment or land. Apart from emphasizing on the location of the property, also go for an entire apartment inspection. Start with all the formalities and paperwork. Once that is done, try to get a check on the reputation of land owners or the developers who are involved with the property, the types of the construction materials used to complete the project, and the possible return you may derive from this investment in the long run. Once all the necessary steps and processes are fulfilled, see which are most appropriate for you and then begin making a decision.
Have you set your goals right?
Everything we do in life serves a purpose. Likewise, ask yourself regarding the purpose you have behind buying a land or an apartment in the location you desire the most. This one step will pave the way for you by providing answers in regards to your right time to invest in residential real estate.
Try to figure out whether you have a long term goal or a short term one. Do you want to own a house of your own or do you prefer paying rent to landlords? All these questions are actually relevant when it comes to buying any property.
You should opt for the one which will prove to be more convenient for you. Are you more comfortable with paying monthly rent or is it more feasible to make monthly installments? Paying rent will give you the freedom of changing apartments from time to time. Whereas, in spite of being in a fixed location, buying an apartment will give you a sense of ownership at the end of the day. You should access these factors beforehand and finally go for the one which will align with your set goals.
Market scenario
We are aware of the fact that the real estate industry is cyclical in nature and is susceptible to macroeconomic factors like economic growth rates, interest rates, population growth rate, etc. Nonetheless, interest rates greatly impact the housing sector and play a major role in making a decision of buying a property. However, if we want to consider the real estate market in light of the current pandemic, the scenario might seem a little different.
The global real estate market witnessed a major halt due to the pandemic situation. Investments or any kinds of property buying or selling was disrupted to a significant level. The massive level of unemployment, reduction in wage rates, and business losses further fueled the uncertain situation. On a brighter note, from the second half onwards with the ease on lockdown, things began to change. According to industry experts, lowered interest rates coupled with a reduction in residential property prices triggered the increase in demand for apartments in the global markets, which eventually aided in some recovery of this sector.
As far as Bangladesh is concerned, the real estate market scenario was stable and showed optimistic signs before the pandemic. The economic growth rate and political stability of the country drew a lot of buyers towards investing into the real estate sector. However, everything came to a halt as soon as pandemic fears spread across the country. Since then, the situation has been quite challenging. Due to lockdown, people maintained social distance to their best level and managed to view property’s under such circumstances. As a result, investors’ plans remained on hold and developers on the other side faced difficulty with their ongoing projects. Due to unavailability of labor and raw material supply, it was increasingly difficult to complete projects. However, as per our research we found that both buyers and sellers were in some kind of dilemma even though the market remained indifferent, ending up with sellers searching for potential buyers and buyers looking out for suitable apartments.
Budget regulations
The new budget of FY 20-21 laid out notable changes in regards to the real estate sector. The government came up with effective measures in order to help the sector gain some momentum. The favorable conditions, if implemented in the right manner, will come in handy for individuals who have been waiting for ages to grab the opportunity to become a homeowner. To start off, Bangladesh Bank slashed the interest rates to single digit and fixed it at 9%, in order to attract more investors to the real estate sector through bank loans. Considering a bank loan for housing purposes has never been this convenient. Even for those who were reluctant would consider it to be a right time to invest in residential real estate.
Apart from this, having the middle income to lower income families in mind the government introduced a zero-equity home loan. This step can be a major gateway for a lot of people to find their ideal homes in the long-run. The government has even allowed undisclosed income to be invested in the real estate sector without having to face any form of scrutiny by the Anti-Corruption Commission (ACC) and the National Board of Revenue (NBR). This particular decision has the potential to attract a huge level of investments in the real estate sector.
Interestingly, the government even deducted the registration cost of apartments to 10% from 14%, which will consist of other fees associated with property buying. Removing the extra pressure of 4% registration fees are likely to drive more growth in the real estate sector in the future and bring commendable change to the whole infrastructural dimension.
Are you ready for the commitment?
Real estate investment holds the potential to generate lucrative returns, considering you will cautiously make your move and take a wise decision. These sort of major decisions require an intense level of willpower and commitment, and it will help you to achieve the dream of owning a house of your own.
Nowadays, even technological advancements have moved into the real estate sector, making it even easier to find the right property for you. The more you get yourself educated on the current changes and adapt to it, the easier it will be for you to identify the right time to invest in residential real estate. Assess the factors of profitability and try to comprehend how bright your future can be due to this investment. Once you have considered all the factors rationally and eventually buy an apartment, this can be the best place to enjoy and experience all the special moments in your life.
So why wait any longer? Have you been thinking of buying any property lately? Do you have any other factors to consider in mind? Share your thoughts in the comments section below.
