4 mistakes to avoid when investing in real estate
At a time when property prices are skyrocketing, real estate investment is a lucrative decision because the value of a well-invested property is most likely to appreciate. There is a rising trend of people purchasing properties not just to stay there but as a long-term plan to gain a steady income. However, buying property is a major decision, so one needs to beware of certain common mistakes when investing in real estate:
Not having a definite investment goal
Like any other investment, one also needs to have a definite goal when investing in real estate. The objective should be concrete, such as receiving a specific amount of fixed income by leasing out the property, letting it out as a vacation home, staying in the house, and letting out a part of it as a paying guest accommodation, etc. One should be clear about the purpose of the property once it is bought.
Choosing property at the wrong location
Where one’s property should be located largely depends on the purpose of buying it. For example, if one plans to rent it out, buying a house in a prime or emerging area in the city makes sense, which can provide one with sufficient rental income. On the other hand, if the goal is to let it out as a vacation home, the ideal location would be the countryside, a hill station, or a coastal area, which people frequent for their holidays. Additionally, regardless of the, one must buy a home in an area that is safe and well-connected.
Underestimating or overestimating the size of the house
The size of the property one buys depends on various factors: how many people will be staying in it, whether there will be children, the budget, and how much furniture has to be accommodated. If one plans to lease out a flat, the approximate income one expects from it is also a deciding factor; the bigger the house, the more the rental income. Buying a small home may be suitable for those who expect lower income levels from the home, have a limited budget, and need it to accommodate a small family. On the other hand, those who expect to earn a substantial amount on the side, need to house many people, and have a wider budget range, can choose to buy a larger property.
Not considering potential tenants’ requirements
Suppose one is buying property to rent it out. In that case, it’s essential to factor in future tenants’ possible requirements, including lawn space, amenities nearby, spacious rooms to move in their furniture, a furnished kitchen, and a dedicated wash area for increased convenience. If one is offering a furnished home, it should have all the necessary furniture and appliances to suit modern needs and living standards. One should consider all of these factors when buying a property for renting purposes.
