Choosing the ideal location while buying an additional property!
Generally a decision to purchase an additional property is normally as an investment for future use or to use as a rental property. Whatever may be the reason the decision is easy to make but the actual buying requires a lot of study and work. This is because there are a lot of chances where one can lose money and even eradicate the returns completely. No one who invests in a property should face the possibility of losing out on money because of an investment they have made. To make sure that this doesn’t happen, you can check out this great guide to calculate roi on rental property to ensure that you can measure how well your investment is doing. But it is important that you consider all the factors below first before making an investment into a property.
Generally buyers prefer to contact a real estate agent to help them get the best deal possible in a short span on time. However it is advisable to initially search for an investment on your own to clearly understand what your priorities are and what is there in the market. This is because choosing an agent could put unnecessary pressure on the buyer to purchase before having found a property that actually suits the buyer.
Here are few things to consider while looking for the best location.
Locality: the quality of location plays a crucial role here as though the buyer may not be thinking of staying in the property, but in the future the locality would determine if the property will appreciate and in case of rental property; determines the type of tenants the property will attract. Hence the buyer needs to first ascertain the type of tenants they want before making a decision on the locality.
Neighboring Schools: this is a very important factor to look into as most future tenants or buyers would look for a place near a good school. Also better the quality of the school the higher the value of the property will be; at the time the investor would want to sell it eventually.
Crime Statistics: no one would want to live in an area with a high crime rate. So rather than relying on seller or agent who is waiting to sell the property and make a gain, it is advisable to research the area for such a possibility before taking any step. Things to look into include- serious crimes, petty crimes, frequency of police presence in the area and so on.
Property Taxes: since taxes vary; an investor planning to increase cash flow with rent; must also look into the property taxes. As they would not want to lose too much tax in return of a small amount of rent received. Sometimes high taxes are not a bad thing when the rent too matches up or if the place is being rented out to long term tenants.
Proximity to employment areas: locations which are easily accessible and can be reached quickly from places of work or have high employment opportunities attract more people, hence more tenants and future buyers. Over the past few years’ demand and value for flats in Gurgaon; Haryana and similarly in Hinjewadi; Pune have increased significantly compared to just a few years back due to the high growth of companies and employment opportunities in these areas.
Rents: Eventually in case of a property bought sole as an investment the rental income will be the main attraction of the property invested. If the buyer is thinking of paying most of the loan through the rent acquired they may need to look into the fact that if the average rent of the area is sufficient to cover loan EMI’s, taxes and other expenses. They should also consider speaking to local Letting Agents to see what the market is like in the area.
Wrapping it up
Eventually one needs to research the area completely to make a fair judgment on how well placed the area will be profitably in the next five years.
?In general, the best investment property for new investors is a residential, single-family dwelling which attracts renters in the form of families and married couples. This is because generally families are more likely to be financially stable as compared to one person and would end up paying their rent regularly. Moreover with both partners mostly working these days, two people can live more economically compared to one by sharing dual income towards rent and other expenses making this a safe bet for the flat owner.
Owning a property as an investment is tough and one needs to tread very carefully. However, to make your life easier you can check out these property manager websites, as hiring a property manager can help make your life a lot easier. However, you still have to be careful. Hence the most important factor would be to first narrow down on the locality for appreciation potential and future cash flow, these days upcoming areas with numerous facilities have been attracting a lot of investor attention, such as flats in Gurgaon which boasts of the best malls and companies along with various upcoming projects. Unitech Group one of India’s leading Real Estate player and the first one to achieve the ISO 9001:2000 certification in North India too have built up its reputation with numerous well known residential flat in Gurgaon, along with many other such developers in the area.
Finally finding the ideal rental property means being realistic about expectations and have a healthy financial balance where the investor can wait comfortably before the property starts giving sufficient cash flows. Consequently the first step would be to create the right financial situation to invest into the ideal property.