Real estate business is a highly unpredictable business venture in India. Buying and selling of real estate property has equal probability of both profit and loss. Timing is the keyword in any real estate property dealings. Selling at the right time can result in huge profits.
The basic idea to make profit in real estate business would be to buy when the prices are low, hold the property till you feel the value has reached its peak and has saturated, and sell it out keeping a huge profit margin. But the problem which usually arises following this rule is the huge maintenance costs involved during the holding period which increase manifold in the metropolitan cities such as Delhi and Mumbai. This waiting period is very frustrating as you only have to incur expenses, which might reduce your profit.
Here are certain tips for a committed and serious real estate investor-
1. Decide what to sell?
Choosing the right kind of property and the proper investment method is highly important. Different kinds of property should have different ways of investment.
The most reliable property in which one can invest in to get an assured return on investment (ROI) is rental property. Rental property comes for as low as Rs. 5-6 lakhs in small towns. I am from a small town called Durgapur in West Bengal and I know how these properties are selling like hot cakes here. What one has to do is to simply stay in the house for a period of time; repair it occasionally for which you can also get tax exemptions and finally sell it. Although returns are guaranteed in investments of this nature, they usually trickle down slowly.
Owning commercial property is a better proposition compared to business property as the hassles of repairing the property as in a residential property is greatly reduced. Investing in such property usually bears good fruit. Location and infrastructural facilities should be taken into consideration while investing in commercial property. You get a better price for a location where you get the Metro, Railway stations, Bus Stands and local bazaars easily.
Owning a plot of land and selling it at the right time is one of the easiest and most profitable kinds of investment. This kind of investment doesn’t have any recurring costs associated with it and is thus a pretty safe investment. The waiting time can be particularly long in investments of this sort.
2. Gauging the market
In real estate business you have to be always very aware of the existing market conditions. India is a very fluctuating market, so keep an eye on it. Buy when few are actually buying else you may have to buy in the listed price. Sell at a time when you are in a position to make a good offer. Calculate the time value of money before declaring the price. Keep note of the expenses incurred during the holding time.
This is the most important part of a real estate business. You have to be smart enough while pricing keeping in mind the competitive environment, the future utility of the property and other important issues like location of the property in the cities of India and the demand of the particular property. Thus, you can easily expect Rs 8-10 lakhs for a 3 bedroom flat in the Gurgaon region, which is the upcoming technical hub of Western India.
These are the few tips which can help in your decisions of selling and buying real estate property, but ultimately it is your will to take a risk and your vision which will make you reap good benefits from buying and selling of real estate property in India.