Have you ever dreamt about owning multiple properties and securing rent from the luxury 3BHK house in Gurgaon that you invested in? Of living off that money for years to come? Chances are that you probably disregarded them as unachievable dreams.
But there is absolutely no reason for you, an amateur investor, to believe that you can’t incur a profit out of your small investment. Following are some tips to help you get started on the right foot for owning those luxury flats in Gurgaon that you dream about.
1) Assess your financial position and the cost
Before investing, it is important to calculate your finances to ensure you meet the monetary goals.
It needs to be noted that real estate investment incurs costs other than the purchase price of the home and therefore, it is imperative that additional costs be kept in mind during the calculation.
An investor needs to be aware of their net worth, monthly cash flow, and tax liabilities to determine the best strategy of financing their investment. Buyers can hire professionals to help them plan and advise.
2) Determine your purchasing strategies
Although most investors would prefer to attain financial independence to avoid paying for interest rates and mortgages, it is advised that they get bank loans to avail of certain tax benefits.
After defining your goals and finances you can implement either of the two strategies given below.
- You could buy one property with cash; or
- You could buy four properties with 20 percent down on each investment.
For the latter, you can use all your cash flow to pay off one mortgage at a time. For example, this strategy would allow you to pay off your first 3bhk house in Gurgaon in about eight years, the second six years later, the third four years after the second house, and so on. This way you would potentially be able to pay off for your four 3bhk flats in Gurgaon in about 20 years.
Alternatively, you could buy just one property and use the cash flow from its sale to buy another one.
3) Decide what to buy and research the property
With the upcoming residential projects in Gurgaon and every major city, it might be confusing to choose the right real estate for you. While any credible seller would inform you about every important detail, it doesn’t hurt to go the extra mile with some research of your own.
The amenities on offer, the history of the construction company, the materials used, and the area a property is located in are all important factors to consider before investing.
The development and the scope of the neighborhood and its connectivity to necessary establishments can give you a real picture of the returns on the property you intend to buy.
Following your decision to invest in the dream 3bhk in Gurgaon, conduct due diligence before finalizing a deal. You can hire a lawyer to do that for you, but it’s best if you read the documents yourself too.
Ask the builder to incorporate all the promised features in a legal
document and verify the seller’s ownership of the property.
4) After the deal
Before signing the dotted line, hire a lawyer to whet out the agreement for loopholes and do not delay in the registration of the sales deed.
After ticking everything on the legal checklist, you can sit back and relax in your new home. On the other hand, if you’ve bought the property with the intention of absent ownership, determine the potential cash flows of your investment.
Typically, most properties don’t incur profits shortly after selling. Renting it out, on the other hand, is more of a long-term strategy. With the competitive state of the rental market, it is wise to rent out a property rather than flip it. So try to switch that ‘flats for sale in Gurgaon’ sign for ‘flats on rent’.
Conclusively, it is important to understand that inexperience does not guarantee failure. Backed with the right information and strategies, you too can be king of the market, regardless of the money you’re starting out with.