5 Important Factors to Consider While Investing in Real Estate
Are you deciding to invest in the real estate market of Dubai? If yes, this can be the most smart investment decision of your life. The real estate market of Dubai has been significantly growing since the last few years, and with the assistance of the best investment companies in the city, you can also join thousands of other investors. However, you need to remember one thing.
Similar to all other investment sectors, the real estate market comes with it’s own threats and potential risk factors. This is why making smart decisions relying on sound information and solid facts is so very important. While it is important to gain the help of professionals and experts in the market, it is imperative that the investor is educated as well. Otherwise, no amount of assistance or guidance will turn out in your favor. Below are some of the most crucial factors you have to remember before making an investment in real estate.
1. The location of the property
Even if you communicate with a lot of real estate developers in Dubai as listed on LuxuryProperty.com, they will all repeatedly tell you to focus on location. This is the top factor to consider while purchasing a property. It does not matter if you want to invest in a commercial or a residential property. The most serious factor that will guarantee your profit is location. An ideal location should be near to lush greenery, markets, essential facilities, transportation and so on.
What you should look for:
The best investment companies of Dubai suggest that while selecting a location, you should think about how that place is expected to develop over the course of time. For instance, the beautiful open land behind the property can someday turn into a loud factory which can degrade the property’s value.
Therefore, you should examine the expected usage and ownership of the surrounding places before investing.
Majority of investment companies of Dubai do this before advising suitable places to their clients. Since they are linked to agencies and government bodies, they can gain the crucial information faster than anyone else. Their information will guarantee how suitable or unsuitable a location can turn in the coming years. To know more, please visit here.
2. Expected profitability and cash flows
Before doing an investment in real estate, you should keep in mind the problems of ROI. Cash flow means the amount of money you will have after all the expenditures. In order to gain a favorable return on the investment, you should consistently try and regulate a positive cash flow. The best investment companies of Dubai will help you with this.
What you should look for:
While measuring the expected returns, many investment companies of Dubai keep in mind the following profits and costs:
- High property value because of renovation
- Income created by rentals. Inflation can boost the cash flow.
- Advantages of depreciation
- Potential surge in intrinsic value due to permanent appreciation
- Expense of renovation before resale
3. Property Valuation
After hiring a great investment company, they will initiate property valuation. This critical step is needed for price listing, insurance, purchase and investment analysis.
What you should look for:
Different methods are used by investment companies for real estate valuation. For instance, in the sales comparison approach, sales of properties are compared having identical characteristics. In the cost approach, the expense of cost and land minus depreciation is covered.
This method is most suitable for new properties. Lastly, there is the income approach which depends on the expected cash inflow. This approach should be utilized in case your end goal is to rent out the property.
4. Purpose of investment and future
Many real estate investors who fail or experience financial downfall are because they do not have a clear sense of purpose. This mostly happens because real estate is a high value investment market having low liquidity. Moreover, if the investment is mortgaged, the investor should focus more on the sense of purpose.
What you should look for:
A reliable, licensed real estate investment company such as RealVantage will help you to achieve a good sense of purpose. The following categories apply to investors which can be utilized as the purpose of investment.
- Buy and use for yourself
- Buy and sell in the future
- Buy and lease
- Buy and sell soon
5. Current property versus new construction
With new developments, you may have customization choices, reasonable prices, and modern facilities. However, there might also be risk of delays, high expense, and the doubts linked to a new developed area.
On the other hand, the current properties allow convenience, quick access, decreased prices, and established improvements.
What you should look for:
Below are some things to do while selecting between a new development and a current property.
- See the furniture, fixtures, and quality of equipment if they are included in the sale.
- Before settling on a new development, remember to examine the developer and go over their previous projects and their credibility.
- Examine the maintenance expenses, outstanding dues and other costs.
- Completely review the recent surveys, appraisal reports and property deeds.
Wrapping it up
So, these were the top 5 factors any investor has to consider before choosing to buy any property in the global hub of Dubai. Since there are so many property options in all types of locations and price ranges, it is not difficult to settle on a property. In fact, you will find it hard to narrow down your choices and this is where the above mentioned factors will help.
You can make as much money as you want in real estate. A big chunk of the city’s economy depends on the surging property sector. The investors come from the far corners of the world and new projects are undertaken each year. This is why it’s real estate investment sector is so promising. If you want to become an investor, it is crucial to gain the guidance of an investment company.
A good investment company comes with an in-house team of active and expert professionals. These people will advise you on all the investment related matters and assist you in searching for the ideal properties. Moreover, they will deal with all your paperwork and close suitable deals.
