Investment in real estate is believed to earn guaranteed returns, that too big ones. Along with the worldwide reality sector, real estate India is also growing by leaps and bounds and inviting more and more investors. Buying Property in India is indeed a great investment option, however, doing with without knowing the basics can flip the table and bring losses as well. To fulfill your dream to earn maximum profits by investing in booming real estate of India, you need to have a thorough knowledge of latest real estate trends along with financial and legal aspects of property buying and selling. Brace yourself and to check the profit-potential of your real estate investment ask yourself these 4 questions, before finalizing a deal.
Have you checked your Credit Report?
Real estate investment requires high monetary funds and majority of people require real estate loans of some type to make the investment. Before planning on any real estate investment, you need to check on your credit report to ensure it is on point. Any mistake in the report should be corrected beforehand so that you do not experience any glitch in getting the finances and credit you require. Getting loan on a property that won’t be your primary residence can pose as a challenge for many; therefore, making sure that you have credit report checked before agreeing on any property is a must.
How much will it pay you in return?
While buying an investment property in India, it is important to do a lot of research as homework to get good returns. Simply investing your hard-earned money in real estate won’t fetch you high returns, you need to research the locations and the rental value of the location to know what type of returns you can expect. If you plan to rent out your property to tenants, the ‘1% rule’ can be of great help. This can let you know whether the property would be good investment or not. This rule is pretty simple. All you need to do is see if you are able to get at least 1% of the total amount you have paid for buying the property. If the monthly income is 1% or more, your returns would be beneficial.
Can you save on Taxes?
While making property investment, you need to check with your real estate agent or broker or even take advice from a reputed property legal advisor about tax-saving. Tax on investment property could be pretty high. Therefore, it is important to ensure that you have researched well in advance to save on taxes. Depreciation write-off could be the most significant benefit to get tax benefits. You can write off the depreciation of the building, you are investing in, as a tax deduction. Your tax advisor would help you with the specifications on the same. Usually, residential buildings tend to depreciate after 27 years while commercial buildings depreciate after over 39.5 years. You can also get expert advice to get save some tax on the property loan, insurance, maintenance expenses, etc.
What is the growth index of chosen Location?
Location matters a lot while choosing a property, whether you are buying it for personal use or for investment purposes. Unlike property purchase for self-use, where you look for the amenities, facilities, connectivity, etc., an investment property is about a location, the appreciation rate, and growth index. You can always look for the worst or the oldest property in the best street in the area. This property would definitely experience a sudden appreciation in rate and its price would surge to meet the price of other properties in the area after even a slight renovation. This is called fixing and flipping. Finding the worst property in the best neighborhood and renovating it to sell it at a much higher price. Further, if you are looking for long-term investment, you can look for investment options in area where infrastructural development in under planning. Such areas, with upcoming metros, highways, employment hubs etc., also experience a surge in property price and are great for investment.
Although great returns come when you take risks but a smart buyer always research and do the homework to minimize the risk probabilities and earn great returns on investment. Asking these questions before finalizing a real estate deal can help you to execute safe and sound property deals and earn great returns on investment.