The best real estate investments offer a steady source of income along with wealth growing opportunities leading to long term asset appreciation. Investment properties provide a reliable and convenient source of income for many owners.
Buying real estate properties provides several benefits and is far superior than making investment in stocks as the value of the property appreciates over a given period of time.
However, the most crucial question that remains to be answered is what constitutes a good property investment?
Let’s try to learn about some of the unique characteristics of making smart and profitable real estate investments to reap maximum benefits.
Top Characteristics of a successful property investment
Extensive planning is one of the crucial requirements before putting your funds into real estate investment. It’s necessary that your potential investment must be able to yield long term returns.
Here are few key points to look for before going for any property investment:
–Focus on durability
Real estate investment needs to very durable and must be able to build wealth for generations. As there is no fixed maturity period on property investment, it’s possible to sell them at the right opportunity at your convenience. For ex: There are some properties in Indian cities which have been held for many decades. Some of the most profitable real estate properties around India are held by families or trusts.
Thus, depending on the location and the kind of real estate investment, it can be endured for long periods.
Real estate markets are local in nature and differ in terms of location and finance requirements. Investors can make profitable investments by leveraging on the knowledge of the local community. Having a team of people across different geographical areas is common for most investors due to the diverse nature of real estate.
Real estate exists physically as you can visit and view your property, have a chat with your tenants and show it off to your family and friends. It’s possible to touch or feel them which gives you some degree of control over your physical investment. Moreover, if something is not working properly, you can always fix it or get it repaired or make further enhancements which is not possible with stocks or bonds.
–Assessing quality of tenants
One of the primary considerations in real estate investment is choosing reliable and good tenants who will be residing in your property. This matters especially, when you need to let out your property by making a solid investment and want to enjoy a steady stream of income from it. In case, the tenant defaults on their payments, then the risk of investment becomes greater for the investor.
The key to successful real estate investment lies in proper planning, research and due diligence on properties, good understanding of real estate laws and requirements and having realistic expectations in lieu of market conditions. Based on your approach, real estate can give you positive or negative outcomes in return.