Real Estate: Buying and Selling

Making a real estate investment often seems like a straightforward activity for most people. After all, the real estate market is known to give instant returns. What seasoned investors will not tell you is that a successful investment is backed by in-depth market analysis and an evaluation of the risk involved. This excerpt proposes some considerations to make when making a real estate investment. 

Identify A Market Gap

To identify a market gap, you must conduct thorough assessments to establish a problem faced by a specific segment of the population. For example, if you live in a tourist town, you may find out that the area does not have low-budget accommodation. Conversely, a person living in the outskirts of town could attribute slow growth to the lack of affordable land parcels. To solve this problem, they could subdivide large tracts of land into smaller, affordable units. 

Consult With Real Estate Agents

Once you identify a market gap, consult with your real estate agent to establish the viability of your investment. Real estate agents have real-time statistics of the property market that could prove valuable and help justify your investment. For example, suppose you intend to build apartments targeting generation Z, the real estate agent will give you information regarding the purchasing power of your target market and what they look for in an apartment. For instance, they could advise you to put up the apartments for rent since your target market may not have stable sources of income. Besides, swimming pools, gaming rooms, rooftop patios and spacious living rooms will attract them to live in the complex. 

Be Cautious With Financing

After identifying a market gap and ensuring that your idea is worth investing in, your next step is to finance your project. A mistake that green investors make is seeking financing without knowing the exact project estimates. This approach often makes them abandon their project halfway. Avoid this pitfall by ensuring you seek estimates from at least two independent quantity surveyors. The project estimates must make allocations for market dynamics such as inflation. 

Armed with accurate information, approach several financiers and assess how they structure their investment loans. If possible, you should hire a mortgage broker to negotiate the terms of the loan and the interest rates. If you feel that the terms do not work in your favour, consider other financing options. For example, you could partner with other developers or consider crowdfunding. Alternatively, you could use your home's equity as seed capital and sell the units off the plan. 

When investing in real estate, identify a market gap, seek the advice of a real estate agent and be cautious with financing. Contact a real estate agent to learn more.