Investing in real estate projects? Consider these 4 factors

By Aishwarya Nair | First Published May 7, 2024, 4:29 PM IST

Real estate refers to property consisting of land and any structures or natural resources attached to it, including buildings, houses, apartments, and commercial spaces. It is one of the most prominent and sought-after investment avenues globally.

Real estate stands out as a top-tier investment avenue in India, renowned for its success and high ratings. For many workers and employees, it represents a significant once-in-a-lifetime investment opportunity. While numerous factors play vital roles, strategic planning, steadfast focus, and an initial investment can lead to substantial gains in real estate ventures. In this regard, first-time investors must consider the following key factors before diving into real estate projects.

Location

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If the real estate investment also serves as a permanent residence, its location becomes paramount. Factors such as accessibility to public transportation, safety, proximity to offices/schools, hospitals, shopping/entertainment/sports centers, etc., should be carefully considered. Additionally, investors may want to explore areas near cities where new infrastructure development projects are underway. Conducting a thorough assessment of the area's pros and cons independently can be beneficial. For apartment investments, it's essential to compare the size indicated in the blueprint with the actual constructed size. The importance of homeownership has been underscored once again due to the COVID-19 pandemic.

Construction phase

The need and importance of owning a home have been revealed once again after the Covid pandemic. Along with this, the newly emerging 'work from home' methods of employment may encourage people to acquire their residence even if it is far from the city. Due to this, the demand for housing projects in the rural areas is also increasing. The advantages of cost reduction, high return on investment, and a more favorable environment for business transactions following the implementation of the RERA Act have motivated investors to consider investing in under-construction real estate projects. Conversely, completed projects offer the advantage of immediate occupancy and the potential to avail tax benefits.

Check the documents

To confirm the ownership of the property and avoid future legal tangles, the documents should be checked thoroughly. This will also provide an understanding of the extent of legal aspects required to finalize the trade agreement.

Resale Value

Before making any real estate investment one must understand their resale potential. Future property price appreciation is also crucial to ensure a healthy return on the initial investment. This is a factor that most investors overlook during the home-buying phase. If it is only considered as a project within the budget, it is likely to backfire later. Also, assess how much future potential value is contained in the current asking price.

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