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7 Most Important Questions To Ask Before You Invest In Real Estate

If you're serious about purchasing a home, you need to arm yourself with knowledge, which means asking a lot of questions before signing the actual papers.

When it comes to buying a home, the most common error individuals make is becoming emotionally involved before asking all of the important questions and gathering all of the practical and logical information about whether or not a property is good for them.

It's too late to ask after settlement day, and all problems with the house are now your responsibility. We asked industry experts to uncover the must-ask questions every home buyer and investor should ask in order to guarantee you have all of the necessary information you need before buying a home. So here we go…

1. What Is Your Goal as a Property Investor?

Property-investor 

It's crucial to understand whether you're aiming for a high return on investment through cash flow or appreciation. This distinction has an impact on the type of property you select. Each sort of investment has advantages and disadvantages.

Regular rental revenue is generated via cash flow investments. If you're looking to invest in a cash flow property with a loan, you'll need to discover a property that generates enough rental revenue to cover your monthly payments and any maintenance needs.

This will necessitate a detailed examination of the local rental market and a complete understanding of the condition of your home. Cash flow investments are useful, but they need more effort to locate. It usually entails finding a low-cost property with high monthly rent.

Achieving a healthy cash flow is less important if you can wait for a return on your investment. With a little patience, you'll be able to recoup your investment as the property's value rises. This takes a little longer and carries a little more risk, but it gives you more options.

2. How Important Will Liquidity Be to You in the Future?

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Any investment must have a timetable, or investment horizon, defined, albeit some are extremely illiquid. When it comes to real estate investing, this makes determining a suitable time scale even more critical. Check to see if and when you'll require liquidity, and if so, whether the investment can meet your specific requirements.

3. Which Industries Will You Enter?

Within commercial real estate, you can target a variety of industries. Do you want to invest in retail, medical offices, hotels, or mixed-use properties? Every industry has its own set of requirements and market trends.

Over the last year, data centres and storage space facilities have been attractive commodities for commercial real estate investors. In 2020, data centres generated returns of more than 20% for real estate investment trusts. Investing in self-storage units yielded comparable results, and the industry is likely to boom in the future years. Through 2025, the yearly growth rate is expected to be a stunning 134.79 percent.

When deciding on the type of commercial property to invest in, look for industries with strong returns and growth rates. Because not all investments are created equal, do your homework before making a decision.

Similarly, residential real estate also comes with loads of options, such as studio apartments, luxury apartments, villas, farmhouses, etc. So do your homework before making any investment.

4. When Will I Start Seeing Returns?

Real Estate ROI 

Buying and selling real estate is not the same as trading stocks or mutual funds. You'll probably have to wait a bit for your investment to pay off. If you invest in stock investments through a crowdfunding platform, for example, it could take five or even ten years for your money to pay off. If you're looking to make a quick buck, real estate investing may not be the greatest option.

5. What’s My Risk Tolerance?

Any investment involves some level of risk, and you should know just how much risk you're willing to face before investing. When it comes to real estate, it's crucial to keep in mind that risk levels vary.

If you're interested in flipping houses, for example, you'll be taking a large risk. You're assuming that you'll be able to repay your initial investment and make the kind of profit you want by selling the house at a high enough price. Your profit margin could narrow or disappear entirely if the market falls or if you go over budget.

6. Are the Official/Legal Documents Made Available?

Title Deed-1 

This is just as important as making the emotional decision to buy a home; you want to make sure that what you want is genuinely yours, free of any potential issues with ownership, registration, or other legalities. Some of the important documents, you need to look for, are:

  • The Title Deed
  • Encumbrance Certificate
  • Property Tax Receipts
  • The Release Certificate
  • Building Completion Certificate (BCC)
  • Local Municipal Corporation approvals
  • RERA certificate
  • Commencement Certificate
  • Building Approval Plan

7. What Facilities And Amenities Are You Really Getting?

It's a good idea to double-check that you're getting all of the amenities and services that were promised. A site visit can assist you in determining this. Check for fire alarms, garbage systems, car parking, lifts, and power backup, among other things.

Hence…

Investing in real estate is a major decision, and you can never be too cautious when considering the concerns and safeguards listed above. These guidelines will assist you in making an informed selection about the suitable property that not only fulfils all of your requirements but also complies with the investment goals and objectives.

Create a list of your property requirements to determine the specific features you require in your future home. Furthermore, conduct thorough research and create a smart shortlist based on your preferences, without compromising your goals. But before you sign the dotted line, find out what's in store for the future?

It's important to find out what future plans are in store for the neighbourhood. Will a new subdivision be built? A new school? Is there potential for a high-rise? Knowing the future potential of your property and the neighbourhood will help you determine what steps (if any) you should take down the road to get the greatest return on investment.

Head to Kohinoor Group today for state-of-the-art developments in Pune City. With quintessential properties in the hot locations of Hinjewadi, B.T. Kawade Road, and Tathawade, Kohinoor offers a wide variety of real estate spaces.

 

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  • In Ravet you will find the Kohinoor Grandeur, offering premium 3 BHK flats in Ravet.
  • In Hinjewadi you will find Sportsville by Kohinoor a brand new residential project near mumbai pune expressway, offering 1 BHK, 2 BHK and 3 BHK flats;
  • In B.T. Kawade Road Pune, Presidentia by Kohinoor stands tall, offering luxury 2 BHK and  3 BHK apartments.
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