Home finance is a broad topic and the concept may vary across countries and regions particularly in terms of the areas it covers. For example, what is understood by the term “housing finance” in a developed country may be very different to what is understood by the term in a developing country. But the simple objective of home finance is to provide the funds that home-buyers need to purchase their homes.
Whereas Real estate investing covers all the aspects across the spectrum. It involves the purchase, ownership, management, rental and/or sale of real estate for profit. Improvement or upscale of realty property as part of a real estate property in India and investment strategy is usually considered to be a sub-specialty of real estate investing called real estate development. The foremost cause that leads to investment failure in real estate is the investor going into negative cash flow for a period of time that is not sustainable, often pushing them to resell the property at a loss or go in for insolvency. A very likewise practice known as flipping is another substantial reason that leads to drastic failures as the nature of the investment is often associated with short term profit with less effort.
Making a Killing in Real Estate
The formula entails that one needs to have money to get money. But if you have money, you could purchase a collection of income producing rental properties with tenants instead that are paying you more than you are paying in monthly charges and other mortgages. This refers to occupying positive cashflow from the properties and also receive tax benefits that allow you to substantially reduce what you pay in taxes. So effectively, you will be making money, saving more of your own money and own properties that will potentially increase in value.
The practice also involves buying a house, getting it fixed and then quickly selling it; it is a good way to make a quick profit.
Important Factors to Consider While Buying A Residential Property
Evaluate your finances – It’s essential to evaluate where you stand financially before you plan to invest in a property. You should check on whether you have enough cash in savings so that you are able to pay the 5% deposit? Or can you afford to take on the cost of repaying a mortgage?
Location is important – The prices of houses varies from one location to the other depending on various factors such as infrastructure, public transportation and social infrastructure like shops, mall etc will be more expensive in comparison to houses in the suburbs.
Proper research – The condition of real estate in your area – You need to have a proper research before spending such a hefty amount even if you are moving to a different state or staying in the same suburb.
Consider maintenance costs– When you plan to buy a house, you should inspect thoroughly about all the maintenance costs and consider the same before making any final deal.
Map out a plan of attack – Once you’ve evaluated your financial position, it’s important to use the gained knowledge to prepare a budget for the Real estate investment in India and follow it to avoid overspending leading to financial instability.
Do you want to buy a home? Key Financing Considerations
Have a Sizeable Down Payment Ready – One should have the balance in saving to pay the down payment amount.
Buy as an Owner Occupant – Everyone is interested in buying as an owner occupant, but it can be a prudent move. Ideally, you would buy an owner occupant India property websites, live in it for at least a year; rent that property out; purchase the next owner occupant property.
Be strict about margins – If a property doesn’t add up to the value and profits, it is always good to strike it from your list.
Understand Profitable Features
While your interest rates and monthly margins need to add up, you should also understand which features indicate a profitable rental property.
Start with a Low Price Point
While you may have the money for a high-cost home, it’s almost always more profitable to start with a low-cost investment property.