Sun, 24 Oct 2021

Tips For Real Estate Investors

01 Sep 2021, 16:33 GMT+10

Thinking about investing in real estate property but don't know where to start? Here is a guide of investment tips to help you navigate this overwhelming process and become successful in real estate investing.

Real estate investment is a lucrative business that tends to produce huge rewards. Rather than buying property to live in, investing means buying property to generate income. The idea is to invest your money today to make more money tomorrow. If done the right way, it can create enough profit to cover the cost as well as the risk. In order to become a successful real estate investor, it is essential to form a strategic plan. This investment plan should evaluate crucial factors such as the customer's goals, the cost they are willing to pay, and extensive market analysis for emerging opportunities. Given the locality and size, the amount of finances required for real estate investment varies from case to case. Hence, one can choose the option that best suits their investment plans.

What Are Your Goals

When investing in the real estate market, the first most crucial step is to determine your goals. What are the reasons behind investing in the real estatemarket, and what type of returns does one expect? Is the purpose quick return and cash flow, or is the person going for a long term investment plan. It is imperative to approach this type of investment or any investment for that matter in an organized manner. Hence, determining the purpose of your investment is the first step; this will help us choose a direction that best reflects our desires and goals and falls within our budget and capacity.

If the purpose is quick returns, one can purchase a property and then sell immediately as soon as the market turns. If the objective is steady cash flow, one can go for a rental property, buy and put it on rent. If the purpose is a long term investment plan, then perhaps purchasing a property in a newly established neighborhood is the way to go, one that will develop over time. Hence, reviewing a person's 5-year and 10-year plans before making an investment is very important. Moreover, many properties now come with flexible payment plans, which means even with limited financial resources, one can go for a reasonable investment plan.

Calculating the Costs Involved

In order to become a successful real estate investor, it is crucial to devise an investment plan that reflects your goals and falls within your budget. This is why the next most important step is to determine the costs involved in this venture. Before investing, it is essential to calculate the cost of buying a property and consider its maintenance costs and other legal costs that may be involved. When investing in long term projects, one must remember that they continue for a couple of years and should prepare for any ups and downs that may come and design their budget accordingly. Similarly, rental properties may require some form of maintenance for which the landlord must prepare as well. One must also be mindful of the timeframe this investment will pan out on. Real estate in Pakistan is a booming business, and many new projects continue to enter the market. Suppose you invest in already constructed residential and commercial properties.

In that case, they may start generating quicker results than under-construction properties that are more suitable for people interested in long-term investments. The development of these projects takes time; hence this factor must also be kept in mind when investing in real estate. Due to this, it is vital to have a clear plan for outcomes and goals one is trying to achieve and what is the best way to succeed.

Similarly, it is important to take a realistic approach when investing. When determining the amount of money one wishes to invest, it is important to remember that high end and over the top options aren't always the right way to go about it. Since the real estate business is an ever-growing business with possibilities ranging from plot files to rental houses of many sizes, the customer has many options to choose from.

Following are some of the options to consider:

  • Buying property files
  • Buying plots to resale at a higher value (investment properties)
  • Buying a property for renting out
  • Buying open land with the prospect of future development

This means that the person has many options to consider and devise a business plan suitable to their needs and budgets. Rather than hurrying into the process and going for an option that stretches your budget, opting for an opportunity that may require patience but bears fruit over time is more advisable.

Market Research

Once we have set the goals we are trying to achieve; it is time to do market research and consider our options. Pakistan real estate is becoming saturated with many options, from newer housing societies to existing ones and rental options ranging from apartments, portions and full houses. One can also rely on a property agent to guide us in the right direction. Since it is their job to have excessive knowledge about the market and market trends, they can give a reasonably accurate idea about the type of property or a particular property one wishes to buy.

However, it is also important to realise that their goals may not always align with your goals; hence consulting multiple market investors in this regard is the way to go. The customer can ring up various agencies and inquire about a particular property or a development project in the pipeline from the perspective of a prospective buyer and a seller. In this way, we can get a complete idea about the price range of that property and the authenticity of that project. This exercise helps confirm the legitimacy and standing of the property in question.

Narrowing Down to a Real Estate Property

Once we have taken the three initial steps of devising our investment plan, i.e. determining our goals, calculating costs involved in this venture and reviewing the market, the next step is to select an area or scheme in which one wishes to invest. Pakistan relies heavily on the real estate industry and many view the industry as a fantastic opportunity to invest, which means one is sure to find a project that suits their needs and requirements. The price range heavily depends on the location of any property; hence one must carefully consider the locality in which they plan to invest. Side by side, it is also essential to determine what type of property we would like to invest in. If we wish to go for a plot file that is to become a property in the future or if we want to go for a residential project or do we want to go for a commercial project. Of course, commercial properties are much more expensive than residential properties.

Similarly, the customer can acquire plot files at a much cheaper rate than actual plots.

However, all these factors depend on the buyer's balance between the time and money they wish to invest. After location and the size of the real estate property, the timing to invest is equally important. Market trends continue to change, and it is pertinent to monitor the market to determine the right time to invest. Many factors affect the market trends, while for newly developing schemes, the timeframe is generally predetermined for balloting and other related activities regarding plot allotment.

Emerging Neighborhoods and Fraudulent Schemes

An important tip when looking at market trends is to keep an eye out for emerging neighborhoods and housing schemes. When construction projects are at the initial stages naturally, the cost is relatively low, making it a good option for many to invest in. As development takes place the price and value of the property rise. Hence, keeping a lookout for new projects is very important. It is also important to point out that many fraudulent schemes are also operating that one must be wary of. These schemes tend to exaggerate the perks and features of a property but fail to produce results. Hence, moving towards projects that have previously proven successful is an intelligent way to go about it.

Taking Help from Digital Tools

When it comes to market research, the customer has many options to choose from. Many agencies exist but one can also go on the internet as many real estate websites have emerged. Using these digital tools is a smart way to go about this process as they save time and energy and present a vast amount of data for browsing. Online platforms such as are the perfect tool to help with such ventures; their website and apps are user-friendly, which means anyone can operate their system. And their vast features of filters help narrow searches down to the specifics such as locality, size of plot or house and even show trends that are popular with other customers.

Since these platforms are becoming digital, the need to weed out unverified and fraudulent listings is becoming more and more crucial. This is why makes sure that all listings are verified and legitimate, giving the customer an authentic experience. They help the customer navigate through this overwhelming process and find the best match for their requirements.

Hiring a Third-Party Agency for Maintenance

The next step after successfully acquiring a property is the maintenance and handling legalities of the process. The customer can consider going to a third-party agency to handle the property management process for this step. This step is entirely up to the customer, what they feel comfortable with and how they wish to proceed. Of course, being actively involved in the maintenance process is very important, but getting help from a third party may help delegate tasks such as rent collection etc.

Diversify Investment Portfolio

The last step for a successful guide of investment tips is to always to have a plan B in place. With any investment, real estate investment also garners a certain level of risk attached to it. This is why it is advisable not to put all eggs in one basket and diversify your investment portfolio! Many other investment opportunities exist, such as investing in stocks and gold.

Another option is to invest in multiple schemes in multiple locations to protect themselves from any liability. Hence, it is essential to invest smartly.

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