The real estate industry has long been a niche that is constantly thriving. In it lies vast opportunities for the shrewd, forward-thinking investors and developers. Investments in the real estate sector can take many different forms such as: Investment properties including land, residential, commercial, retail, industrial, and mixed-use developments, publicly-traded Real estate investment trusts (REITs), real estate related company stocks and mutual funds.
The real estate sector has continued to grow locally. This is as a result of increased demand for more properties, infrastructural improvements thus opening up previously remote areas for development, improving client preferences and tastes, an expanding middle class, and the continued entrance of multinational firms who act either as clients or competitors, hence shaping the industry standard
For those armed with the best insight and advice, their future investment strategy can be very rewarding. With this in mind, we will now discuss some of the factors investors should consider before going into real estate so as to mitigate risks and maximize profits.
Key Factors to Consider Before Going into Real Estate
1. Be Specific in Your Objectives
With the real estate industry being a broad industry, an investor needs to be specific about the area he/she intends to invest in. It is important for one to plan their resources accordingly and avoid unexpected shocks by deciding what risk, return and duration of investment to invest in.
2. Carry out Market Research and Be Open to Continuous Learning
An investor should endeavor to find out about the current performance, future prospects and who the key players are in the specific theme they intend to invest in. This can be obtained from visiting the actual sites, through reading research reports from real estate practitioners or by attending real estate expos. While research does not guarantee success of a project, it reduces the inherent risk by informing the investor of potential hurdles,
3. Conduct Financial Analysis and Consider Your Cash Flow
A real estate investment is an illiquid asset class that takes time to obtain back one’s initial outlay. As such, an investor should also consider his cash inflows and conduct financial analysis to gauge the venture’s capital requirements and expected returns. Through financial analysis, projections on expenses to be incurred, expected returns and growth of the funds invested can be determined and forecasted. This will help you in your decision making on the most favourable venture.
4. Conduct Due Diligence on the Prospective Investment Venture
Due to the the current fraudulent activities going on in the real estate sector, investors should conduct proper due diligence on all aspects of the venture including the sellers, the parties he or she is to work with as well as legal restrictions and or guidelines on developing on the particular land parcel or investing in the real estate entity. This ensures the investment is not only available and profitable but also legal and hence the returns are guaranteed.
5. Consult a Real Estate Professional
As beautiful as all the above points are, one thing an investor must not fail to do is to seek the advice and guidance of a real estate professional. Many investors have failed because they tried doing it on their own. With the help of a professional, all necessary areas will be fully and appropriately covered. You can not afford to make such a mistake. Always seek the advice of a professional before investing.
To book an appointment with our consultant, click the button below.
To view some of the available investment options, click
Middlechase Property Limited, is a multiple award winning registered and accredited real estate sales and marketing company Founded in 2010. We rolled out a vision of helping property buyers become cashflow landlords and we have successfully helped over 1000 investors build property assets that produce cash flow for them.Wouldnt you rather join us now?
