101 Tips For Selecting The Right Market For Your Real Estate Investments

A real estate investment is made successful by the interplay of many factors. While the location is truly a major component in making the investment possible, it is not the only one.

Share on facebook
Share on twitter
Share on linkedin
101 Tips For Selecting The Right Market For Your Real Estate Investments

Real estate investing is invariably one of the best options to park your money for a long or short period of time. The regular and definite asset appreciation, low risks, and tangible nature of the property make it a great investment.

What exactly is real estate investment?

Real estate investment is the process that involves the purchase, rental, management, ownership, or sale of a real estate property to generate an income. There are many different types of real estate investments, but the majority fall into two categories: Physical real estate investments such as land, residential and commercial properties, as well as other modes of investing that do not require physical property ownership, such as REITs and crowdfunding platforms, are examples of physical real estate investments. Residential real estate includes almost any place where people live or stay, including single-family homes, condos, and vacation homes. Residential real estate investors make money by collecting rent (or regular payments for short-term rentals) from tenants, or by the appreciation in the value of their property between the time they buy it and the time they sell it. Residential real estate investing can take many forms. It can be as simple as renting out a spare room or as complex as purchasing and reselling a house for a profit.

A commercial real estate space is one that a company rents or leases. Commercial real estate includes an office building rented by a single business, a gas station, a strip mall with several unique businesses, and leased restaurants. Unless the company owns the property, each company would pay rent to the property owner. Commercial properties typically have longer leases and can command higher rents than residential properties, which can result in higher and more consistent long-term income for a property owner.

What is the scenario of Real Estate Investment In India?

Real estate investment is one of the most secure investment options in India. Characterized by appreciation in its property value, and a growing number of MNCs and international companies setting up their bases in India, real estate value is appreciating and is expected to appreciate at a greater rate in the future, making it a great investment option in India.

The latest real estate trends in India have shown that residential real estate in Mumbai and commercial real estate investment in Bangalore has hit a new high within the past ten years. 

Housing real estate has become one of the most wanted assets in post-pandemic India, especially in Mumbai. Real estate investments in Bangalore and Hyderabad have been considered great for commercial real estate. But the investment can only be beneficial when you access it through the right platform or invest in a good market. 

How to select the right market for your real estate investments?

Some factors that play an important role in determining the value of a market and making it a profitable investment are 

  • Regulatory Factors

Some real estate markets are more investor-friendly than others, these can be differentiated on the basis of taxes charged and landlord/tenancy laws.

It really pays to understand the following factors

  • Property Tax Rates

Tax rates depend on the government, locality and festive seasons. While in times of inflation, the prices can go really up, the tax rates can also go down during festive seasons. 

  • Property Insurance rates

The insurance rates also vary depending on the locality, neighborhood, and susceptibility to natural disasters or any other damages.

  • Municipal Landlord Taxes

These taxes are paid by the landlord. Each landlord falls in one of the three categories: either they don’t earn enough to pay tax (rental income), you pay tax on a 20%rate, or a third category where you pay 40% tax. 

  • Local landlord/tenant laws

Tenant/landlord laws can vary from one area to another, the laws give rights to tenants and landlords to help come to an agreement which is beneficial for both sides. 

  • Economic Factors

A locality going through economic decline will not make an ideal investment. Therefore economic health of a locality is also essential to be considered. An expanding population makes the locality a good prospective investment. Similarly, the availability of jobs and newer opportunities, wage rates also help understand the economy. 

  • Real Estate Factors

These usually focus on understanding the market from an investment point of view

  1. Rental to owner occupancy ratio -If a locality has more rented properties, then it will easily make a better investment for landlords. 
  2. Vacancy rates in the market at the time of purchase – Time plays a very critical role here. Even a low-priced property is no good if you have no one to rent it to. 
  3. Housing sale statistics – Buying a property at a decent rate is one thing, but being able to sell it off easily can be understood by a detailed study of the market and housing sale statistics. 
  • Local Market Factors

After going through all the factors mentioned above, it becomes essential to also evaluate these factors on a local level. You might want to look at the quality of the neighborhood, safety,  schools, and their quality, transportation, access to amenities, proximity to shops, and nearest places of employment and shopping. 

In conclusion, following the above-mentioned points can make your investment fairly easier. While most investors find local properties more profitable, one can also invest in real estate remotely and never have to worry about asset management, whether it is through Fractional Ownership platforms or trying Real Estate Crowdfunding

Assetmonk is a real estate investment platform that offers high-end CRE (Commercial Real Estate) investment deals in the form of fractional property or crowdfunding models. The company offers an IRR of up to 21%.

FAQ'S

Real estate investing 101, is a special guide for young and new investors to follow and make educated investments.

One of the best qualities of real estate investment is that they provide a hedge against inflation, which no other asset class can provide.

Related Articles

istockphoto 1394977436 612x612 1

Commercial Real Estate Leases: Different Types and Which Is the Best?

Leasing commercial space is a significant financial commitment and requires commercial real estate leases. These leases can be intimidating, especially because they are a huge commitment that can be costly. However, they are not as difficult as many people believe. A commercial real estate lease, like most other legal transactions, should not be taken lightly. As a result, when renting commercial space for the first time, it is critical not only to thoroughly study the industry but also to have a good understanding of the many forms of commercial leases accessible in India. Also, read Commercial Real Estate Is Booming In 2022: Explore How You Can Also Profit Via This Alternative Investment. Here’s an explanation of the many forms of commercial real estate leases and what they imply for renters and landlords: Firstly, what are commercial real estate leases? Commercial leases, as opposed to residential leases, are an arrangement between a renter (company) and landlord that specifies the property only…

Read more
istockphoto 817688664 612x612 1

The Indian real estate market would be worth $1 billion by 2030: RBSA Advisors

According to RBSA Advisors, the real estate business gets expected to grow by 15% by 2030, reaching $1,000 billion. According to RBSA Advisors, the Indian real estate sector would grow at a 15% CAGR from $60 billion in 2010 to $1,000 billion by 2030, contributing 13% of the country’s GDP by 2025. The organized retail real estate industry get expected to rise by 28% to 82 million square feet by 2023. Per “The Outlook of the Real Estate Sector in India,” the Indian real estate sector is showing strong indications of recovery as the economy recovers from the pandemic. Also, read JLL reports Indian real estate garnered $943 million in investments worth in Q1 2022. Despite a little increase in prices and a slight increase in home loan interest rates, the real estate industry has thrived on good buyer enthusiasm. According to the poll, there is substantial demand for property in Delhi-NCR across all price levels. The entire increase in…

Read more
istockphoto 1394786542 612x612 1

Aspire to be A Top Commercial Real Estate Agent? Here are Some Critical Steps To Becoming One

Do you want to be a successful commercial real estate agent? The Indian real estate market is diversified but vibrant and competitive, particularly for commercial real estate agents. To build a successful niche, they must comprehend the shifting promotional circumstances of developers as well as customer preferences. Staying current and afloat in the market requires innovation and openness to new marketing concepts. Follow the steps below to be a top agent. Do you want to be a successful commercial real estate agent? If this is the case, the first question you must answer is whether you want to work in commercial or residential real estate. To be sure, because individuals are more likely to buy or lease a place to live rather than a location to operate a company, it is simpler to get into residential real estate – where there will always be more prospective clients and transactions. Commercial real estate, on the other hand, may attract a large…

Read more
istockphoto 1263914795 612x612 1

Real Estate Investments: The Hottest Alternative Investments You Do Not Want To Miss Out

One of the best ways to grow your money in the modern era is by making investments. Whether small or large, every investment has got the potential to be a profitable one. It wasn’t long ago that people only knew about the stock market as a primary investment method. But, this has changed pretty much with the arrival of better technologies for making investments and making profits out of them. The hottest topic in the domain of investments is the growing popularity of alternative investments such as real estate. The real estate industry has been in existence for a long time, but it has changed a lot from its original form. Better alternative investments are emerging in real estate, mostly due to innovations introduced by technical firms. There’s still much to learn about this, so don’t worry. We have explained everything about this trending topic in this blog post. Do not miss Aspire financial freedom. Find Out How Real Estate Investment…

Read more
istockphoto 953511340 612x612 1

A hike in housing sales across India in 2022

Despite increasing mortgage and housing rates, India’s residential market is predicted to maintain demand pace this year, with sales likely to exceed the demand that was before the pandemic, at a peak of 2.62 lakh units, according to industry stakeholders. After enduring four consecutive interruptions in the shape of demonetization, RERA, GST, and COVID-19 in the last six years, industry analysts believe the housing market is undergoing fundamental changes and is now at the commencement of a long-term implicit. The FPCE, a homebuyers’ organization, attributes the better buying sentiment to the Real Estate Regulatory Authority (RERA) established under the Real Estate (Regulation and Development) Act of 2016. All major publicly traded real estate developers reported record-breaking bookings in the previous fiscal year and have stated that their sales statistics in FY ’23 would be much better. However, if the entire market is considered, rather than just listed businesses, the RBI’s move to increase the interest rate by a total of…

Read more
istockphoto 973712582 612x612 1

Office space demand recovery gets broad-based as small, mid-sized deals pick up

The pandemic had a significant negative impact on the commercial real estate sector. Public gatherings were outlawed to slow the spread of the virus, which put a stop to corporate demands for office space. Numerous developments are coming in from all over the world as things are improving every day. A solid recovery is taking place in the commercial real estate market, especially in the small- and medium-sized office space segment. Since the beginning of this year, both the volume of direct transactions and lease agreements have significantly increased. Deals are being secured across a broad spectrum, with the majority involving office spaces between 10,000 and 50,000 square feet. The 10,000–50,000 square foot commercial office space is starting to see an increase in transactions, according to Real Estate Investment Trusts (REITs) and many other well-known builders with a sizable portfolio. Surprisingly, additional transactions that go above and beyond the upper limit are also being recorded. What does that imply? Due…

Read more