Things to check before you invest in a property

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Many of you are keen on investing in real estate, and successful investment demands thorough preliminary research. To aid you in this endeavor, I have compiled a comprehensive checklist of key points to consider:

  1. Begin by exploring the opportunities available in the market. Engage in the following activities:
    • a. Connect with Real Estate Agents
    • b. Conduct research on social media platforms, such as real estate groups on Facebook
    • c. Scrutinize various property listings online
      • Once you have a list of potential opportunities, narrow it down to the most intriguing ones.
  2. For the shortlisted properties, take the time to verify the following:
    • a. Identify the promoters and assess their track record
    • b. Investigate the projects they have previously completed
    • c. Ensure that the projects hold VEFA certification (if applicable) Keep in mind that some promoters may lack experience but have adhered to all guidelines for a top-notch project.
  3. Schedule meetings with the promoters and agents at the project sites to ask any pertinent questions you may have. This step will help you further eliminate certain projects and refine your selection.
  4. Consult your bank about the few projects that have captured your interest and seek their advice on potential investment options.
  5. Before making the final decision, carefully assess the region’s rental rates and the risk of vacancy for the selected projects. Understanding the rental potential and market demand will aid in making an informed investment choice.

Now, pay close attention to the following considerations based on the type of property you are considering:

Residential Property: If you plan to invest in residential property, opt for a ‘ready to move in’ residence. Ensure that all plumbing, electrical installations, flooring, and basic kitchen amenities (sink and cooking table) are completed. Fully furnished and equipped properties generally command higher rental returns.

Office Space Projects: Most office spaces are delivered as shell and core units. You can choose to rent the space as-is, allowing the tenant to customize the interior design, or you can opt to undertake the electrical installations, flooring, and painting. The latter approach might yield a slightly higher rental rate.

Retail Outlets: When investing in a retail outlet, be aware that food operators typically require a separate service entrance and specific infrastructure like a proper bin area and grease trap. In contrast, fashion or other commodity outlets may not have such specialized requirements.

Regarding Your Return on Investment (ROI): An acceptable ROI range lies between 4.5% and 7.5%. If you manage to secure a higher cap rate, consider yourself fortunate for achieving an excellent return on your investment.

By following these steps and considering the relevant factors, you will be well-equipped to make sound investment decisions in the real estate market. Happy investing!