Did you know over the last 2 centuries, about 90% of the world’s millionaires have created their wealth by investing in real estate? Have you thought about investing in properties but assume you don’t have enough money, feel you do nothing have adequate knowledge or feel now is not the right time for you to buy your home?
However, It’s a common misconception that you must be either wealthy or a real estate expert to invest in homes.
The fact is that anyone can invest in real estate in one form or another, even if they only have a little money to start.
• What Does It Mean to Invest in Real Estate?
Investing in real estate can mean several different things. It means you buy a house to probably live in, it could mean you buy a property to rent it out to tenants or it could mean you buy a property and hold it for its long-term appreciation value or exit later by selling it for profits. In either of the cases, real estate is tangible, it has utility value, guaranteed appreciation when invested in villas with land ownership & can provide steady cash flow through rentals.
• What To Look For When You BUY Your First Home?
For the average investor, real estate offers the best way to develop significant wealth. As with any and all forms of investing, it is best to get started early with real estate so you can put time on your side. A good way to begin is to buy your first primary residence. Here are a few tips when you decide to buy your first villa:
1. Location: Choose a location or a city that you can see yourself live in, if not now at some point in time of your life. Also, look for the prospective infrastructure or industrial developments in the vicinity over the next 5 to 10 years. Eg. A connecting highway to a major city or metro or airport etc.
2. Neighborhood: When it comes to residential properties, it’s very important to buy a home in a growing area. Prefer to buy a villa with land ownership so that you are assured of appreciation and total freehold of ownership.
My advice goes for a gated community that provides the necessary security & amenities for all its residents.
3. Budget: Decide how much you can afford. You need to have a min of 20% of the property cost as a ready contribution. Eg. If you are looking to buy a property worth 50 Lacs, you need to have about 10 lacs as your contribution, whereas the balance can be funded through the bank.
4. Leverage: Take advantage of the low home loan interest rates to buy your dream home. Today rate of interest for a home loan is at 7% which is the lowest in the last 20 years. Take the longest tenure possible, as when you have surplus funds to can choose to repay early.
5. Due Diligence: When you buy any real estate, it’s important to choose the right builder. Besides doing the due diligence of the property in terms of permissions, approvals, ownership, etc. also look at the past delivery record of the developer. Look for testimonials of its customers and their track record. Look at the quality of construction and how they deliver other services which are part of property buying.
Investing in real estate can be the perfect first investment or a great addition to your portfolio if you’ve already started investing. In the last couple of years, people’s preference is investing in physical & hard assets which are real estate, especially villas with land ownership. People have a great aversion for any kind of risk today and hence have gone back to investing in properties big time.
I hope this article helps you make a well-informed decision. Until next, stay safe & keep growing!