Real estate investments definitely provide a steady stream of income and returns, only if they are truly strategic, solid. As a new investor, how can you protect yourself against unlikely real estate investments? It would be useful if you look at this simple list of real estate investments. If you want to buy an investment property, better check the following factors.
Location: the market valuation varies according to the location of the property. Of course, the valuation of real estate is more expensive compared to similar real estate in cheaper and less profitable markets. Around the world, Moscow, London and Seoul are among the most expensive cities with real estate valuations at their highest levels. Real estate in New York, California, Paris and Rome, among them, has always been at the forefront.
Tenant credit risk: you should know that the appraisal of real estate can depend largely on the expected rental income of the property. If real estate is not likely to generate substantial rental income, its valuation will definitely decrease.
Physical properties: when buying a property, verify the benefit and the type of building, as it should affect the evaluation. Of course, condos are more expensive than apartments because manufacturers are naturally safer, more sophisticated and have better services.
Tax effects: the appraisal of real estate is directly affected by the tax effects. Keep in mind that the property is imposed with stamp taxes and property taxes, in addition to income tax, which can be calculated from capital gains and rental income.
High investment costs: always remember that real estate investments are more practical and more expensive than almost all other types of investments. For example, you can buy and own shares easily. Once you invest a few hundred or thousands of dollars, you can create your own portfolio of shares. This is not the case with real estate assets. Not many people can invest in real estate just because they don’t have the right resources to do so.
Legal matters: most real estate investments are not as guaranteed as capital investments. Safe exchanges, legitimacy insurance and investment security. In the real estate sector, this regulator does not exist, although the real estate regulator judges real estate practices and, sometimes, prices.
Liquidity: real estate assets are not liquidated easily and quickly. Transactions cannot be completed overnight or in a matter of hours. Market conditions should be considered because they will affect the duration and duration of the real estate transaction.