How Not To Invest In Indian Real EstateBy
Akhila Masapogu, 28-Jan-2020
Everybody talks about investing the right way in Real Estate. Well, it also equally important to know how not to invest in Real estate. Awareness about the things which may land you in trouble can take you a long way in this investment journey. Whilst Real Estate investment is truly beneficial to every investor, there are few things you might want to keep your feet off to avoid unpleasant experiences. Though the experience itself is truly a great teacher, it is definitely painful.
So here are a few tips on HOW NOT TO INVEST IN INDIAN REAL ESTATE.
- Skipping the groundwork-
If there’s something I cannot stress enough, that would be about doing lots and lots of research on Real Estate investing. Real estate with its lucrative returns and high-value appreciation, may make investors want to jump in and invest right away. But educating yourself before venturing into any kind of financial stream will help in not learning the hard. Investors who delve into it without proper knowledge about the risks involved or the beneficial ways of earning more income will ultimately be at a loss. Hence doing your groundwork thoroughly will help in taking better decisions in the investment process. Read as much as you can, listen to a related podcast or consult someone who is experienced, these are some of the ways you can research before investing.
- Neglecting Market analysis-
Another big mistake a real estate investor hurry through is analyzing the real estate market. Understanding or analyzing a market is not just knowing a city or a neighborhood it means understanding and therefore forecasting demand for the real estate you are investing in. For example, if you are investing in a residential, you should understand the rental market in the locality and the value of similar property for making sure you are not buying an unappealing property in the wrong location.
- Not having a plan-
Having a plan beforehand will help you not to shift away from your investment objective. Many people who do not have a proper plan and a prior decided budget end up spending more or will not be able to take decisions properly. This will happen if there's no prior plan as to how to go about with the investment process. Having a plan will help you take better decisions. For example, if you invest in private equity there are two options for the investor after the specified tenure. An investor can either exit or reinvest, having a plan investor will be able to stick to the prior decision made. This way having an investment plan can act as a guiding light to the investor.
- Paying too much-
Skipping the above three important steps will ultimately land the investor in making another mistake of paying too much. The investor is going to be at a loss paying way too much for a property that is not of that worth. Firstly the investor will spend more and then will receive less than what they expect. Investors without doing a proper analysis of the market, and not having a plan, often do end up paying more. This is the reason investors need to work smart when it comes to real estate investment. Educating themselves about the market along with some expert advice is always good when it comes to investing in Real Estate.
- Not doing Due diligence-
Due diligence is one important, tedious work that investors need to do before investing Real Estate Due diligence is a process of the thorough study of the property details, history and the previous transactions relating to the asset to avoid any unpleasant experiences further. Investors should never invest in any real properties without proper due diligence as there's much more associated with the property which the investor will never know without due diligence. Knowing about the previous transactional, operational history is important and it is possible only through due diligence. Due-diligence will also speed up the investment and ensure that the property is not into any kind of litigation. Never invest without proper due diligence if you want the experience to be smooth and rewarding if. Assetmonk is an online platform for real estate investing which does all the due diligence for the investors so they can invest hassle-free.
We know that Real Estate is not an easy piece of cake, but awareness about the mistakes you might make will at least help you avoid them. Real estate is the best asset to acquire wealth, but it comes with its complications. So, awareness about how to not invest will help you understand the right way of doing it. Assetmonk is a secure platform offers quality assets that undergo a stringent evaluation process. Only properties that undergo Due diligence can make it our list of high growth potential assets