21 February 2019

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18 Tips to become a successful Real Estate Investor for Newbies

There has been a drastic change in the field of real estate in the past decade. Investing in real estate is continuously evolving to attain new heights. Real estate investors can succeed, when one is well-versed with the new market trends in order to be at par with the knowledge of the developing trends in the industry. With the guidance of a few of the Forbes Real Estate Council members, below are a few tips for investors in real estate –

 

1. CONNECTIONS:

The more contacts you make, the more real estate meetings you will be a part of. Networking and building connections will lead you to the right track. Connecting with people will help you succeed, but it does not end there. Its not that easy as you think.

 

2. KEEP TRACK OF EXPENDITURE:

Keeping track of expenditure is one of the most significant practices one must follow while investing. Being unaware of your costs in relation to investments can significantly affect your returns adversely because each unaccounted cost will detract from your anticipated revenue. By knowing your month to month expenditures, you can be assured of your ability to make long term investments and gain the anticipated returns.

As Warren Buffet says, “Risk comes from not knowing what you’re doing.” Therefore, following your expenses will significant reduce the risk factor when it comes to making an investment.

 

3. SET REALISTIC AIMS:

Be prepared of what you are getting yourself into. Investing in properties is a very big craze now a days, but is not an instant money spinner. These investments can be time consuming and expensive proposal. Set realistic aims for the property you are investing in.

 

4. ANALYSING REAL ESTATE IS NOT DIFFICULT:

A lot of people think the level of analysis completed for agreements is comprehensive than it really is.  Decisions regarding real estate investments are heavily driven by strict rules and regulations. Which can be surprising to new analysts. People in the real estate technology and automated world have started using analysis softwares which are more sophisticated.

 

5. COMPREHEND THE MARKET:

It is of utmost importance that you grasp your market. This involves a lot of hard work , and time consuming data studying activities. That data will prepare you for the upcoming year. A lot of decision making is required to become an expert in inventory, neighborhoods, city trends, interest rates, construction costs and market needs.

 

6. STRENGTHS MUST BE YOUR HUB:

Often a lot of people participate in multiple activities at the same time, which is not good and it also messes up the work. Stay focused of what you want to do and what you can do. Become a professional in one particular thing. If you want to wholesale, do that. If you’re building a portfolio, focus on just that. Carefully define your keys and get remarkable at it.

 

7. GRAB ONTO TAX BENEFITS:

To buy a residence first is a good idea before purchasing an investment property. A lot of your money will be wasted in paying rent & at the same time you will lose tax incentives.

 

8. APPOINT FAITHFUL PEOPLE:

It is very important to work with people you trust. That does not mean friends and family. The key is that you should be fully confident with people you are working with and with those you can rely upon, such as your banker, your co-investors, your broker, your developer, your general contractor… truly, relationships are everything. Especially for the builders and developers in India.

 

9. BE ATTENTIVE & PATIENT:

Don’t make any impulsive decisions. If you think the opportunity is good and worth then go ahead with it because it probably is. Patience in this field is really important.

“Hope is patience with the lamp lit”.

 

10. BE AWARE OF MARKET CYCLES:

New and seasoned investors should pay attention to the market cycle. Examine what the market is experiencing before purchasing anything. All markets are cyclical and most of the time the elation of investing in an asset class is done by a word of mouth. When you know that you buying the product for the right price, buy it without hesitation.

 

11. BE OPEN TO NEW IDEAS:

While searching for the right investment property you may be willing to buy a property close to your house. But the market which is right for your investments might be in some other state or region. Just because of geographical boundaries don’t restrict yourself on investing on any property.Be open to new ideas of investing in property as they may result in being more profitable and lucrative in the future.

 

12. ASSESSMENT AND LOGIC KEY:

Fright and avarice are the fuel behind too many failed investors decisions. Do not invest with your emotions. Research  about the rates in the market and then invest. Look at vacancy cost, maintenance prices and tenant risk profile, only then park your money in property or real estate.

 

13. PURCHASE A RESIDENCE FIRST:

Always buy your permanent residence before investing in any other property. Financing is easier and plus you need a home to live in. After a year or two you can move up to a new home and keep the first one for rent.

 

14. WATCH CHANGES IN THE MARKET DEMAND:

It depends on what are you planning to invest in, because markets will change their demand and price constantly despite of what you do as an investor. Make sure you invest smartly focusing on the cash flows and returns.

 

15. AVOID LEVERAGE, AVOID RISKS:

A lot of times beginners use an easy way out by using leverage for buying properties. This is really very risky. The point is you don’t need leverage to make money. There is an easy way to make more money with you any risks – use your own money.

 

16. FROM A LONG TERM PERSPECTIVE, LOOK INTO THE RENTAL MARKET:

While buying and selling is very fascinating on TV, it may not be your best investment rolling. Invest into a long term property that will help you gain a large amount of profit instead of just buying and selling a property for small amounts over short time periods.

 

17. FLEXIBILITY & ADAPTIVE:

Like the other industries, real estate is also huge and booming. In case you don’t have an investing experience it’s better to have a degree in it.  It is very important to understand each asset class and their intricacies. Work and shopping habits can change but be flexible and adaptive as a real estate investor.

 

18. STUDY THE OPPORTUNITY ZONES:

Real estate investors should learn as much as possible from the opportunity zones as they can because along with education, nothing helps more than experience in the field.

 

As dynamic as the real estate industry has become in India, these new ways for real estate investors to make money will certainly prove beneficial. These 18 tips curated to help a newcomer will generate successful ideas to invest in real estate. Giving you a holistic approach to investing with the real estate builders in India, these factors form as the ultimate guide for how newbies can make money investing in the real estate industry.

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