Real estate development is proving extremely lucrative and versatile investment, says millionaire real estate investors. But how can you make it in this industry when it is already known that there are many dynamics? What are the most crucial factors to look for when investing in real estate development? While an overwhelming majority of people know that location is key, there are many other factors to look out for to help drive your investment to the right direction. Here are some of the essential things to consider when planning to invest in the real estate market.
Know the Right Location: Location is still king and will continue to play a crucial role in determining the profitability of any real estate investment. Properties that are located strategically near amenities, green spaces, leafy suburbs, scenic views and where infrastructure is developed have a higher valuation. What’s more, proximity to markets, transport hubs, tax-exempt areas and freeways will play a huge role, especially when you are dealing with commercial property.
What Should I Look for?
when looking to locate your property, consider the future developments in the area or how it is expected to change over the investment period under which you plan to have your property. Today’s quiet residential environment could someday be turned into a noisy commercial or industrial park. Therefore, perform thorough research and work with government bodies in charge of development to know what the future holds for that location.
Valuation of the Property
Why It’s Important in this factor? Property valuation is important not only when planning to purchase a property but also when selling it. It is also essential when planning to take out an insurance policy and when doing investment analysis and when filing taxes. What should you look for?
Here are some of the commonly used real estate valuation methods:
Sales comparison approach to valuation: This method compares the prices of similar features and probably in the same settings. This will give you a fair market value for your property.
Cost approach: This method is the most popular. It considers the cost of land and construction but also considers the depreciation. It is new for not only new buildings but also old properties.
Income approach: This method considers the potential or actual future cashflows. This approach is mostly applicable in rental properties whose future incomes are predictable based on past and current industry trends.
Designing your property to suit the needs of those renters or potential buyers will help you fetch more from renting or sale of your property. Take your next step today and begin enjoying the top benefits of higher returns by investing in the real estate sector. If you are not quite sure where to begin let an experienced real estate development firm help you.
