Why do we earn? We earn to spend the money on our daily needs. We also earn to save some part of it as savings. Monetary savings not only provide you financial freedom, they also act as security after retirement. One way to do the same is to start investing, which by the way, most of us know and are adept at. Some of the portfolios worth investing would without any doubt be gold, banks, money deposits, government schemes, stocks and what not. Interestingly, real estate investment is one of the most profitable options that are available today.
With a promise of high-end returns combined with low risk of losses, investment in real estate is a dream-like option for any smart person, who would like to see his/her money grow. But not everybody can become adept at cracking real estate deals as it is easier said than done. It takes a bit of skill to become an expert at investing in real estate. Just like stocks and shares, investing in real estate can sometimes turn out to be a gamble. If played right, there are big bucks to win. But the best part is, the land value does not take a plunge like how it does with respect to stocks. Give it some time, and you can see the value appreciating again.
That being said, there are other factors and hurdles that might come along your way if you are a novice or a rookie at investing in real estate. As a heads up, I am hereby giving you 9 points where you, a potential realty investor, could go wrong while investing for a property in a specific place. Example, let us consider Mysore in Karnataka. It is one of the four Tier-2 cities in Karnataka with the highest growth potential of 50.3% in the last two years, as a result of which, properties in Mysore are selling at sky-rocketing prices. If you want to invest on sites or plots in Mysore, you should be aware of the following mistakes and try to avoid them at all costs.
· Falling for realty agents’ lies: Many at times, realtors resort to lying to make them investors buy a property that no more sells. It could be for various reasons like – bad locality of the property, less market, inferior construction materials used, low or no accessibility to public needs, etc. It is up to the investors to realise the true colours of the agents and take necessary precautions to not fall for such outrageous lies.
· Ignoring to check the documentation: At times, when people are elated, they tend to believe in their agents or sellers and go ahead with the procedures of buying a property without checking the documentation. Given the fact that people tend to get elated upon a successful investment, many greedy people use this opportunity and misuse the trust that their clients have on them. It is very important that you do not trust anybody blindly with regards to your property investment. If needed, hire an external agency for documents verification before committing to purchase a property.
· Being impatient: Surely you must have waited long enough to make your realty investment, for whatever might be your reasons. That definitely does not mean you should speed things up and go purchasing properties without following some standard procedures. Ignoring to do the same might prove to be your biggest financial mistake of your life and cost you dearly. Waiting for the right choice, doing a thorough research about the property, enquiring about the same with the people of the locality, considering the risk factors, evaluating the market rates for the future scope of the property are some of the steps that smart investors do before parting with their money.
· Investing at the wrong time: Realty investment is not always hunky dory, it has its own set of risks involved. If you are looking forward to invest on a piece of land or a built property for your own use, you can skip this point right away. For those intending to invest for re-selling, it is very crucial that you consider the guideline value of the property and also the current and previous market rates of the property. If the same property has exhibited a slump in its growth trend, re-selling it for a profit margin would be out of question for you in the future, thus negating your investment. For good returns, it is imperative that you consider all the factors mentioned.
· Failing to negotiate: A skill nonetheless, negotiation plays a very important role. Greedy realtors might hike the price expecting a good profit margin or even demand higher commission from the transaction. If you do not negotiate, you might actually miss out on some of the perquisites. However, negotiation with them can turn out to be a blessing in disguise. It could save you a lot of money or give access to certain perquisites that other people usually do not get.
· Talking to people: A potential investor should always keep in mind that realtors are not the only people who know about the property and its details. Often, people in the neighbourhood of the locality provide significant insight into the details that might be masked by the realtors for their gains. People who live there in that locality will obviously know more about the same than the ones to just try to market it. Apart from that, since they do not have any business transaction with you, chances of them telling the actual scenario of the locality remains high thus giving you vital information to help you decide whether to purchase the property or not.
The above points give a significant highlight of the blunders that rookie investors might do while investing their money in real estate. However, by no means does it encompass all the mistakes that individuals all over the world commit and we have no intention to target or insult any real estate agents or sellers. This article is just to give a glimpse to potential investors and help them in their real estate journey. We hope it helps.