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Buying Investment Property: 5 things you should keep in mind
If you stumbled upon the idea of purchasing a property as an investment tool, you would be making so many predictions that might turn down your expectations. The reason is simple: when we are too optimistic and enthralled with a project, we often sideline some of its most basic yet crucial requisites. It’s just like a small hole that causes the entire ship to sink. Let us understand it more clearly.
Not every project is worth investing in. Undoubtedly, an investor is more concerned about the return, and that is what most real estate agents highlight. However, an intelligent investor must pay attention to the investment first and then its return. In other words, no matter how lucrative an offer is, what matters most is how much investment it needs.
It’s growth rate, not growth, that matters. Investment is as good as the growth rate it earns. Most of the time, despite the great promise of growth, your investment suffers or fails to meet the inflation adjustment. A continuous growth rate is always better than sudden growth and a longer duration of stagnation or slow growth.
Tenure of maturity: People tend to make fast money, which puts their investments at risk. If anything prevails for long, it loses its sheen, and return on investment is no exception. If a project requires a longer period of repayment, it makes no sense to invest.
Using an investment as a hedging tool: An investment is also considered a hedging tool by investors. If the project offers a low return, the investor tends to divert their investment to other securities. Therefore, the business plan should be crafted so well that it will ensure a good return and keep it intact through market fluctuations.
The objective of investment: One should be clear on the vision and purpose of the investment, whether you want to invest for greater return, for personal use, or for both. Your clarity on the objective of the investment helps you choose the right property to invest in .
