It’s not an easy task to invest in real estate, especially in a market like India. Although it’s one of the most lucrative markets that pulls together almost $34 billion in investments; it’s still not child’s play and people who aren’t used to the idea of investing will likely back out soon. The key is to understand the type of market in the real estate industry is in. For that, you need to understand how real estate works and how you can spot a good real estate option. If you can’t differentiate between different properties, it’s likely you won’t be able to judge investments. People like this were those who couldn’t understand that 2 bhk flats in Thane West were going to prove profitable. So, let’s discuss a few factors that can help you avoid making mistakes and understand how real estate works.
It’s a Slow Market
The real estate market is not child’s play in the sense that it doesn’t work impulsively and quickly. You can’t expect investment to offer yields instantly. Similarly, you can’t expect the property appreciation value to increase quickly. However, that doesn’t necessarily mean all things go bad when you invest your money in real estate. This also gives you an advantage to clearly think thoroughly and consider all options. Since it’s a slow market, there will be fewer surprises to deal with compared to other industries and markets. Suffice it to say, you’ll have ample opportunities to make a smart move if you’re careful about how you observe.
The Primary Factor: The Location
Coming over to how you judge real estate options, the primary factor that decides the property’s value is the location. You can rely on the location to show not just the current value but the future potential value as well. Properties can be constructed anywhere using the same material. However, it’s the location the structure’s standing on that determines how valuable it is. Whether it’s commercial real estate or residential, the value depends upon the location’s accessibility, proximity, amenities, etc.
The location’s accessibility describes the property’s value in terms of its locality with regard to the main city. If you have an area that opens up to the suburban side of the city and offers easy access to highways that take you to the main city, that means the area has good accessibility. Furthermore, the accessibility of a location can also mean that it’s close to the main points of interest. These points of interest can be anything from transit offices, subways, retail centers, bus stops, etc. The area must have easy access to residential as well as commercial places. People living in residential units will need commercial markets to become consumers.
All that is available in and around the property that interests the resident are commonly called amenities. These can be fitness centers, gyms, hospitals, schools, swimming pools, sports grounds, internet facilities, etc. The type of facilities and amenities that are offered in the area determine the value of the property.
This further provides accessibility to high-end options that support comfortable and luxurious living.
The Secondary Factor: The Structure
Most people might assume that this is where we talk about the walls, doors, and structure of the house.
Although they won’t be wrong, it’s still important to understand that this isn’t limited to just that. When we understand how structures of properties work, it’s easy to use that knowledge to your advantage during negotiations. Right off the bat, it’s not something you can learn instantly. You’ll need the help of professional real estate agents and consultants that can give you different insights.
A property basically has walls, floors, HVAC, clotheslines, and water and sewerage systems. Check those first.
See if you can find some faults with the electrical wirings. No matter how many visits you make to a property, you’ll find something new to investigate. And that investigation will lead you to reveal another question about the property that you’ll need an answer to. As long as you keep on asking the right questions, you’ll be doing fine in terms of learning. Gradually, once you know how to spot the bad aspects of the property, you’ll know its real worth.
For starters, you can go for properties around great project sites that offer the same amenities, provisions, and structural superiority. An example of this can be the residential units in and around the Piramal Vaikunth project that’s a notable success.