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Tips to maximise your profits from real estate investments

• August 23, 2018

Land, since time immemorial, has been considered synonymous with power. The owners of the land were usually the ruling power and the landless lived a life of drudgery and turmoil. No wonder, when it comes to the acquisition of land, we have an inherent desire to own and bequeath the same.

In the present scenario where availability of loans has made it easier to own a property, real estate is considered to be an investment that would make millions in the years to come. Well, it may sound fabulous, but if the present market conditions are to be believed, investments in properties have earned insipid returns in the past few years. Then what makes the real estate market lucrative for the buyers?

99acres delves deep into it and brings to you the present fact along with a few other tips to help you gain the most out of your investments in the Indian property market.

Till few years back

Since the past many years, the real estate market in India has been going through a phase of massive change and therefore, investment in property may not be a good choice to make. In fact, many a times property is not really an investment. Given the fluctuations in the realty market, the anecdotal stories of how a property brought years ago is now worth crores, may not stand true at present. Deals are now being struck albeit at low prices and the investors still remain wary of their money in this erstwhile lucrative sector.

Subdued property prices, muted buyer sentiment and low return on investments are some of the major factors that have contributed to a temporary fall in the magnetism of the realty market.

However, following the implementation of Real Estate (Regulation and Development) Act [RERA] and Goods and Services Tax (GST), the industry has witnessed a sudden upsurge in the levels of delivery, accountability and transparency. Consequently, we presume that investing in the realty market can yield better returns in the time to come.

Here are a few tips to help you maximise your investment gains:

1. Understand the market before you invest: In case you are a novice, the first and the foremost thing that you need to do is to apprehend the market and the trends, for masked opportunities and losses. Get acquainted with the terminologies therein, and have a clear cut idea of any proposed infrastructure around the area. Before you decide to invest, you need to be well-versed with what is happening around!
2. Invest more in rental properties: Real estate investments, when done right, can offer some of the most profitable opportunities in the market. Not only do they help you generate revenue through a good amount of positive cash flow, but also offer tax benefits to the owner. And yes, not to forget, the property appreciation that you might get in future!
3. Enhance your investment level along with upgrading your knowledge in the field: Gradually, as you get to know the industry better; you eventually come across a plethora of lucrative deals that you may not have realised earlier. If at present you are investing in residential properties, try and expand your arena and look out for avenues in the commercial segment as well.
4. Use forced appreciation: Rental properties are valued based on the income that they generate and forced appreciation can be one of the best ways to maximise your returns on your rental investments. For those who are not familiar with the jargon, Forced Appreciation is an increase in the value of property due to the investor’s actions and is a widely used methodology to increase the value of a property.
5. Leave no room for scepticism: Before cracking a deal with a property broker, make sure to go through the entire documents for authentication purpose. Opt for RERA approved projects to avoid rampant malpractices in the market and if possible, hire the services of a property lawyer to avoid discrepancies in future.

Income producing real estate is one of the few investments to have a meaningful value. In case you are a long-term investor, you need to analyse the market conditions on a regular basis along with the trends in the local market. Keeping a track on the pricing trends in the market will further help you to make a right decision and will ensure a positive appreciation in the overall returns.