Learn the tricks of property investment

You would have heard of someone who is a pro when it comes to investment. They would buy a property, stay invested for some time, exit the market only to re-enter somewhere else and gradually the value of their investment just gets bigger! Sounds almost like a dream? Here are some tips.

Case 1: You have a modest budget, but you want to make the most of it. Opt for areas that have a growth potential in terms of jobs, upcoming infrastructure, connectivity or demand. It is important to understand when to enter a market. For example, metro has been a big driver in the Delhi real estate market. No matter how high or low the prices were, since the metro started plying people, there has been a 15-20 per cent rise in values of properties near the metro-line across the city. If you know of areas that have such a potential, you are a gainer! Formal indices like PropIndex can help you arrive at an informed choice.

Case 2: You have a good budget at hand and want to upgrade your lifestyle without compromising your goals as an investor. When values remained stable over the last few quarters, there were active buyers looking for a house in plush South Delhi premises. A lot of prospective buyers approached Magicbricks through our webinars to ask whether it was a good time to exit and re-enter. There are two scenarios here- One, if the market has been stable over the last few quarters, buyers have the benefit of discounted rates and second, if you are looking for an up gradation, usually these are for end-use. However, if you are an investor, know that a large proportion of buyers are those looking into futuristic locations that are easy on the pocket and can boast of capital appreciation. If you are flipping as an investor, you must keep this in mind. Markets are usually unpredictable, therefore make calculated approaches and do not be a speculator.

Case 3: You are exiting a market to re-enter another. Suppose you get Rs 50 lakh from your previous property and the new one costs Rs 43 lakh. Win-win? Not already! Do not fail to calculate the additional charges. It comprises of new settlement costs, closing and holding costs, etc. If you have achieved a desired profit, then you have made a good deal.

Experts advise that if you are investor, then you must always learn the trick of re-entering after exiting.

 

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