Reasons Why you should not step into the real estate business before reading this …
Real estate is the only business which keeps on growing for so many years. You will be surprised to know that the real estate business is increasing in India since 2008 and it is valued at around 120 billion us dollars in 2017 and is estimated to reach 1 trillion dollars by 2030.
In other countries, too real estate business is increasing at a fast pace. Real estate is the major factor in the UK economy. Despite being a coronavirus pandemic, it has a turnover of around 68.1 billion British pounds.
First of all, before investing in real estate you should know everything about real estate. Real estate is any property i.e. piece of land or building or house provided with resources like water, electricity supply, fence, etc which is legally registered in your name.
Real estate is distinguished into 3 categories :
Residential - Residential property is that which is sold or bought for living like a house, flats, empty land for residence, etc.
Industrial- Industrial property is that which is sold or bought for building factories, parks, etc.
Commercial- commercial property is that which is sold or bought for offices, headquarters, hotels, etc.
How does the real estate market work? And important factors which you should consider while buying or selling any real estate…
Real estate is all about dealing i.e. buying and selling your property at its highest rate and getting profit as much as possible.
In real estate, the first step and most important step is to buy a property for rent or sell. And this is the most crucial thing because the kind of property you buy will decide whether it is profitable or not. You know what Germany is the largest country in Europe whose investment in residential real estate alone was around 25 billion euros between September 2020–21.
While buying any property you need to check every corner deeply. A profitable property is that which has all necessary and profitable construction done. It must have a good location, no hidden flaws or construction left, etc. The most important is to verify the seller’s background and all the legal documents.
The second step is to find a buyer for your property. Now it depends on you whether you want to find a buyer on your own through your contacts or want to hire a real estate agent.
The real estate agent is the person who brings buyers for you and takes a percentage of the profit from the deal. If you are just making an extra side from it then I would strongly recommend you to hire a real estate agent, as after that he will bring buyers for you and you will be able to focus on your other works too.
The third step is the last but not an easy step and that is to convince the buyer to buy your property. So this last task will decide whether your decision of buying this particular property is profitable or not. As you are the seller then you should know a secret that a good seller is the one who buys the property at a low cost and sells it at a high profit. But that doesn’t mean that you start something illegal. Integrity should be always be maintained between the seller and the buyer.
There are so many other things too like loan and bank formalities, etc but that we will discuss later in my other write-up. These are all the basic things that you should know before stepping into the real estate market. So this is all how the real estate market works.
Is it risky to invest in real estate?
Investing in real estate seems risky and is risky too. But without taking any risk you cant achieve anything. But if you understand the dealing in real estate you can make a lot out of it.
Real estate is popular for so many years. People generally invest in real estate and collect profit without much effort. Investing in real estate could be the best resource for your income after retirement.
And if you are into any business or any work from which you are earning your daily bread, this could be the best alternative to make your extra side income. Real estate could be your long-term investment as the more time passes the price of the property goes on increasing.
Overall it is risky but profitable too. You just need to understand the real estate market. And basically, the risk in real estate is the bad connectivity area, electricity or water supply, hidden construction flaws, etc. If you check all these factors before buying any property then there will be no risk at all.
And the most important thing which everyone should check is that property you are buying or selling should be legal and all the legal paperwork and other formalities should be completed otherwise you can get into big trouble in future.
All about prices of real estate
Generally, the price of any property increases with time. As the population is growing every year so demand is also increasing at a fast pace. Because everyone wants to buy extra land or house or property for their future security. So it is obvious that prices are anyhow going to increase except in some situations when the market falls off.
The early you will buy any property, the less you will have to pay for that and in coming years, the more profit you will get in return. Moreover, it is expected that the real estate prices are going to increase by about 30–40 % in the next 4–5 yrs.
But by how much rate your property is going to be increasing every year depends on some factors which I had discussed Above. But let’s discuss it in detail now. So you can get more clarity.
This is the one major factor in buying or selling property. A good location attracts more buyers and hence more profit for the seller. A good location consists of a safe area, clean environment, good network, easy to access shops and malls, market area, medical and hospital facilities, etc.
For eg- If we talk about particularly in India, if you buy a house In Chandigarh then the prices will be low and increase at a small rate. On the other hand, if you buy a house in Gurgaon or Bangalore then prices are going to increase at a double or triple rate as these are the IT hubs and give more job opportunities for business owners and entrepreneurs and have all the facilities.
- Resources/ amenities
Secondly, after location, anyone willing to buy a house will want it with having all the work done or house having every facility like water supply, electricity supply, underground telephone line, swimming pool, garden, etc.
For eg- A house that has a water supply for 24 hours will have more market value than a house having a limited time for water supply. Buyers will be more interested in buying a house which can give more comfort to them or their family.
so the third major criterion on which the price of any property or house depends is infrastructure. So the first look of the property must be eye-catching the marketed rate is always high for the house has a good layout, interior, and exterior design, vibrant and soothing colors on walls, good quality of paint and bricks, and strong structure.
For eg- a property having a modern interior and designs will be selling at higher rates than a property having an old boring interior and dull colors.
Apart from these three, there are so many factors which decide the price of a property or a house but these 3 are the major ones which I discussed in detail above.
Can you easily sell your property if you have all the facilities which a buyer needs?
You might be thinking yes, and why not? if the house is facilitated with all the needy things and has everything best, then why not?
And you are not wrong, anyone who reads this article up to there sincerely and paid attention to the above factors I discuss, will have the same answer as you have.
But wait, I mentioned above that those are the factors on which the price of the property depends.
Whether a buyer buys a property or not depends on his budget. I am not saying that buyers will not consider those factors. He will look at that too. But in the end, all the decisions depend on how much money he is willing to pay.
So there one more factor which buyer will surely look upon and that is :
Affordability- Every time anyone thinks to buy something the one thing that comes to their mind is how much money he/she is ready to pay for that. Everyone has a budget with a range of money. So affordability is one of the most important factors which you need to consider before deciding the price of your property.
Because even if your property is fully furnished with modern designs and everything best, but if not fit in the buyer’s pocket, the person is never gonna buy it.
So make sure you sell your property at a reasonable rate. So that buyers will not think twice before buying that property.
So yes readers that’s it and this is all to which I want to make you aware before stepping into the business of real estate. Now I’m super sure that there is a clear picture in your mind whether you want to step into real estate or not. And if you are ready to invest in real estate then good luck and make sure you consider the criteria which I discussed above.