Tips To Improve Your Real Estate Investment Strategy

Activities of the real estate investment market are highly diverse and there are many other things besides planning, plotting, and managing the property. It also includes construction activities, financing, valuation, amenities management and also the consultation or brokerage facilities. 

Property is scarce and therefore much in demand, well due to this reason it is hard to hit the prices of properties nowadays. Therefore, it is the major reason why real estate puts a great impact on the economic sectors just as the healthcare sector or the automotive industry. The property makes a huge contribution to GDP in UAE and not just this but also generates prosperity and employment. 

Real Estate Impact on the Economy

Real estate plays a vital role in the economy of the UAE. Residential property provides residence for families. It’s the biggest source of savings and wealth for many residents of Dubai. Therefore, commercial real estate includes buildings, apartments that introduce spaces and jobs for offices, retail, and manufacturing. Real estate investment and business become a cause of revenue for millions.

Property construction in Dubai is labour-intensive and stands as a major force in generating employment. Well, nowadays many investors are entering the real estate market in order to secure their future benefits. And here we have jotted down a few outstanding strategies for easy real estate investment to help the investors standing on the edge to enter the market. 

Effective Tips to Improve Real Estate Investment Strategies

Real estate investment is almost everyone’s dream and nowadays it is more than just a dream. It is a long-term investment although with less liquidity but with promising benefits. So turn your desire into reality by just working on some real estate tips and tricks before you make an investment. 

Real estate that is successful has long been one of the confirmed methods to become wealthy. You can secure a piece of land by buying and developing an agricultural potential of the land or you can also build a house to rent it out. In addition to this you can also make your investment property attractive to your tenants so that you can get your desired rent. There are many common methods to become successful in the real estate market. 

Real estate market is never static and not just in aspects of residence. However, we all are aware that real estate provides better returns as compared to the stock market without being more volatile. No doubt real estate comes with risk but it minimizes over the period of time. The longer you hold your investment the bigger the returns you will get. When the condition of the market gets better, the value of the property improves on its own. 

So Here’s Our Rundown of Successful Real Estate Investment

• Choose the market and timing wisely

You must always keep in mind that while you invest in real estate try avoiding very hot markets. Some of the real estate investors may appreciate their property values but you should not buy the property at high prices as you might end up losing your money when the market gets normal.

Market of property always moves in a cycle because of the desire for economic benefits. Also, each real estate market faces a different phase of cycle. You are required to understand the market from every aspect, in each phase of expansion where prices are rising, sales are increasing, construction is low, affordability is good, and capital investment is improving.

Try not to own a property that is dependent only on a single economic resource, whether it be anything, auto industry or tourism. We are suggesting this as a backup to the future profits of your investment. In case if the single economic source of the area fails for some reason the prices of your property will definitely go down. Apart from the value your property will get vacant because no rentals will find the work in your area.

• Explore the hidden market

Most of the buyers take property from the distressed sellers as the property ranges lower as compared to the market price. Never grab such deals because you might find the property at the lower price but you will end up maintaining it due to its poor condition. 

But you can look to the properties of distressed sellers that haven’t put their property in the market yet. A genuine and well-maintained property is the only one where sellers want to sell the property just to get money.

• Manage risk in the real estate market

Never purchase a property for which calculation looks bad as it will scare you all time on losing the deal. Keep in mind is to never fall in love with the real estate property that you buy with the purpose of investment. The reason why you must not fall in love with your investment property is because someone else is going to live there not you. 

Also you need to be aware of risk tolerance such as if you are afraid of fixing anything before you buy the property better you go with the turnkey properties in the market. 

When you own an investment property for sale then always target to pay 10 percent of the total amount as a down payment. And it is much better if you pay 20 percent down if it eliminates the private mortgage insurance. It charges lower interest rates on the mortgage as well.

If you pay a good amount of down payment then it also reserves you a good cash flow. Also, it will reduce the risk of selling your property at loss if you get a good buyer in no time of buying it. 

• Go for “Best” not for “The Best”

There is a common mistake that most real estate investors do. Most of the investors try to make property in the best area. Also, investors try to renovate the property in a working-class area and wish to turn it lavish. But generally home buyers forget that the money spent on home accessories won’t be added to the selling cost later. Thus, you might lose money. Overspending the money on home is a waste so always look after the best in class and do not over furnish it with elite products. 

First, of all you need to fix everything that is damaged or broken. Always make little changes that don’t cost much and still change the look into lavish. For instance, two-tone wall paint goes well over a single tone color on the wall. Easy soap dispensers or trash receptacles are just another example. Leave the granite or corian countertops, expensive decorating, or the top of the line appliances.

• Basic standards of real estate investment

Never renovate the basement into a second rental property unless you know if it is allowed or not. Do not rebuild the first floor of the building as a commercial space; if your local zoning laws do not permit it. Also always be careful of your food service business regulations before replacing a break area that is already full of vending machines with a small sandwich shop. Do not assume that you could add a spare room or a second floor to the building. Always measure a degree of work that needs a permit before you build it.

• Consider offbeat real estate investments

Always remember, a real estate does not have to equalize the choice between apartment buildings or a single family house. You have several; other options just as commercial office buildings, industrial spaces, warehouses, and storage unit complexes as all of these real estate generates a monthly rental income.

If you own industrial buildings or office space, you have a great opportunity to reduce the overall cost with the help of triple-net lease (in which the tenant covers the basic insurance and pays off the maintenance and property tax). Alson, then your investment will yield a stable cash flow with small other expenses. 

• Maximize the value of the property

Look for different methods to maximize the property value, seeking out more benefits for the same property that you have invested in. It could conclude from renting the property to a bank to install its ATM. 

You can always rent out a space for a small commissary in the lobby area. You can also generate a rental earning from what otherwise failed to add on to the business’ cash flow. In a complex apartment, you can go for further value-added services. For instance, provide trash pickup service from one’s door to the dumpster for a decent fee per month.

You can also add a security guard to the building or concierge to pick a modest amount on a monthly basis. These small facilities will help you charge a handsome rent because these facilities will make your property look more attractive. 

Another alteration is that you can apply to house flipping. Rather than owning a property, maintaining it and selling it to another home buyer, give it to the tenant. After the tenant has moved into your house with a lease, you can start to look out for suitable buyers. It is known as a turnkey rental property, and you can easily sell it to a new investor who wishes to jump into the real estate investment market without any hassles.

Conclusion

Many investors think about money if they wish to invest in property as it requires financial stability. Property is a scarce resource because it is just impossible to produce additional land. And as a result, the property is vastly considered a sound investment. Therefore, it must be acknowledged that standard wisdom regarding the property market is evolving. For this reason, real estate almost certainly impacts the economy of the nation. 

The property investment represents an everlasting opportunity in the market. Moreover, there are different faces of real estate investment depending on the economy and the present real estate market condition. But if you wish to invest in such a scarce resource, you must know every opportunity. 

An open mind and active decisions are much needed to be successful in the real estate market. Doing this you will help yourself to minimize the risk factor while maximizing the profitability. Get in touch with investment agents as they will help you build a custom portfolio. Also investment counsellors will advise you to own a rental property to maintain your cash flow in different growing markets across the UAE. 

Frequently Asked Questions (FAQs)