Investing in real estate can be a profitable venture because it is one industry where investment can give significantly high and steady returns. However, as profitable as the real estate industry is, it can also be risky. This is why a detailed plan of action can help you minimize risks and make the right investment.

There are a number of factors that can directly affect the return on your realty investment. A strategic plan, carried out under professional guidance, can be of immense help before beginning with the investment process. But what are these factors that can make or break your investment? If you want to look for commercial property for sale but are clueless about where and how to begin, we are here to help you make a step-by-step plan.

Factors To Consider Before Investing in Real Estate

1. Evaluate Your Purpose

Investing in property just for the sake of it is one thing but examining potential investments and estimating results is another. Many people buy properties because it is an asset that they can hold on to as it cannot be liquidated easily. With such an approach, they can miss out on other ways of profit generation through property investment. It is therefore important to consider your purpose before investing in real estate.

But first, you must know what a property can be used for. Once you know your personal purpose, think about whether making a profit is your primary aim or do you simply want to acquire some tangible asset for use in the long-term?  

Some ways of using property and generating profit from it when you are not using it directly are commercial leasing, residential leasing, using it for business, re-selling. Other than this it also makes for a good long-term investment because property is an asset that cannot be liquidated easily.

After evaluating your purpose, it is time to take a step forward and explore the market. 

2. Talk to a Professional

Go to a real estate developer to get an accurate picture of the market because professionals working within the industry can help you make a more informed decision. They can provide you with a curated list of properties and at the same time, help you narrow down your options.

One such team of professionals is Neo Developers, who are a  leading name when it comes to real estate developers in NCR. They will help you significantly broaden your investment options and change the way you understand real estate altogether.

Get in touch with such reputed and established names if you want to explore properties and commercial projects in upcoming prime locations in the Delhi-NCR region.  

3. Explore Your Options

Ensure that you widely explore site locations and property options before investing in any one. Shortlist locations where you see an income potential and check with your developer to see any available properties there. Go for established or upcoming locations where value appreciation of the property can go up in the near future. It can be challenging as an individual to research all this on your own so you can take the help of a developer for this task.

This factor is important because the site location can determine your returns. If you choose to invest in a central location, the property will be expensive but at the same time, you will get a high and steady rental value out of it. In an exclusive location such as the Dwarka expressway, an investment in an upcoming project such as the Neo Square can yield amazing results.

Selecting the location also depends on your purpose. If you are looking to lease the property as an office space, the property should be in a specific, mainstream area. However, this will not be the same if you wish to invest in a residential property.

Also, keep long-term impacts in mind while shortlisting a location. Even if the location that you are investing in is under construction, if you feel that the site holds the potential to become active in the near future, go ahead and invest in it. If you think you are paying a high price for a property at a premium location, assess if you can get higher returns on it.

Similarly, explore the type and property that you can invest in a particular location. You can invest in commercial property on Dwarka expressway as it will relatively be a safer investment option because you get higher returns on it. You can also invest in residential property, a whole building, a section of a building, etc. Pay attention to the condition of the property that you are investing in too. If the property is not in a good condition, you will have to bear the additional expense of renovation.

You should also calculate your estimated profit while figuring out the type of property you want to invest in.

4. Calculate Estimated Returns

This factor is essential to determining whether your investment will be profitable or not. An analysis of the project site and its current value shall help you estimate its future value and the profit you will be able to derive from it.

Analyze every aspect of your potential investment carefully and calculate the expected returns in the short and long term. If you think you will get a steady return in the present and a high return in the future, the property is worth investing in. If not, then you should look for other options.

5. Consider Possible Risks

Consider every possible risk attached to real estate before investing your money in it. It can be things like risk of vacancy, value depreciation, among others. Discuss the same with your developer and see what they have to say about it. Also, always do your own research to get as familiar as you can with the industry.

Conclusion

Investing in real estate is no child’s play and you need to be aware of a lot of things in order to be able to make a decision. We hope that the aforementioned points have helped you understand investing in real estate better.