Maximizing Profit On Your Real Estate Investment: A Beginner's Guide

Maximizing Profit On Your Real Estate Investment: A Beginner's Guide


With the festival time approaching, the market is about to get flooded with splendid offers, many of which are going to get your attention. And if this is the year that you are looking to put some money in the market and reap the benefits of these grand plans, there are a few things you need to know, especially if you are a beginner in the scene. A number of times offer that may seem attractive would have nothing substantial to offer in reality. The terms and conditions, unclear clauses, and no value for money are all primary reasons for developing displeasure.

One must not get stuck amidst all this and should keep their focus on their target i.e., maximizing the profits that your real estate investment was supposed to be getting you. And for that, there are a few pointers and tips that you must always remember while putting your money in the market.

Look Beyond the Freebies

We love the freebies, no matter how they come our way. But while buying a house, do not just get stuck on the 'amazing' freebies that you may be getting with the property. A bunch of freebies, be it a car, a bike, or a house itself, is in no manner the right reason to choose to invest in a place. Judge the developer, study the area, and understand the potential of the reality as an investment. If you like the prospect but do not wish to take the freebies, ask the developer to provide you a cash discount in lieu of them.

Present and Past of the Market

There are always certain regions that show growth, while the others are on rest. The absorption rate of the market is defined as the inventory of real estate in an area, and the influx of buyers in the region. With a low absorption rate, the market grows stagnant, and so do the prices. An incident like this in the past is indicative of where can it happen again.

Generation of Income

When it comes to real estate investment, there are 3 ways that a person can create an income out of the property.

  • Increase in property's value

  • Rental income

  • Profit from business activity conducted there

While the third factor is strictly limited to commercial real estate, the other two factors are the ones that you should be on the lookout for. The increasing value of a property is a facet of profit that depends on a lot of factors, including government intervention, overall development, facilities, and the proclivity of the public.

Rent, more or less, depends on similar factors. However, renters won't come to a place if it doesn't suit their needs. For maximum profits, you need to understand what value your property will add to the buyer or renter in the future.

Understand Leveraging and Returns

In case you are not using your money and have borrowed the sum to cover your end of the payment, there are a few terms related to real estate that you must understand before getting your hands on the property. When you borrow the money and use it to invest in the security of the property, it is called leverage. And when you earn from the property, it is called a return. When this return goes beyond the amount of interest that you will be paying for the leverage, you will be earning a fantastic amount of profit, maybe even higher than the market average. If your investment grants you that, voila! You must definitely go for it, but only after doing all the calculations.

Real estate is a tricky business, but it is not rocket science. As an experienced investor of real estate will tell you, nothing in this world will give you as huge returns as real estate. All you need to know is the actual value and future of your investment. For any other information on investing in luxury and affordable flats in Jaipur, visit the one-stop solution for all real estate queries, KGK Realty. Book an appointment with our qualified and talented agents by visiting us today.