With the recent boom in property, it makes complete sense for almost anyone of us to invest in the same. More often than not, the return on investments in property is exponentially higher than that in any other asset, and if you have some extra money on your hand than it might actually prove to be your best bet to invest it in a good property.
However, like everything else, even property investment is easier said than done. Before investing your hard earned money forthright, you must consider some of the vitalities of the industry in order to be able to maximize your returns. Let’s take a look at a few important factors that need your due consideration!
While investing in property, you must always have a good exit strategy, i.e. you must have a definite period of time in mind for when you would want to sell of your property to gain good returns. Moreover, you must have a plan on how will you like to sell it. For example, if the property is in a residential area, you might want to sell it to a builder for better returns or in case it lies within an upcoming commercial area, you might want to offer it to a shopping complex or mall.
Not only will your exit strategy help you focus on the kind of purchase you wish to make, but it will also help you in managing your finances in a better way. In addition, you must also have a backup plan in mind, just in case the property does not appreciate as per your speculations, or if finding a buyer takes you longer than expected.
Mortgage or loans usually come across as some great ways to leverage the property you have invested in, however, in order to actually make the most of these tools, you really need to read between the lines. You must compare the pros and cons of the same, and chalk out with your accountant as to what would work best for you. Again, speculations with respect to the market trends in foreseeable future will help you make a better, more informed call.
Investing in property, like other things comes with strings attached. The key to maximizing your returns is to be fully aware of what you’re diving into. In case of a ‘buy to let’ property, you’ll be required to pay taxes on the rent you received. Likewise, if you buy a residential property, and do not plan to use it as your own home, the ‘capital gains tax’ will be applicable to the property. It is, therefore, highly advisable to be aware of the various ta slabs related to the property you’re likely to invest in.