'z Best Way To Get Long-Term Returns While Buying A Property - Article Catalog

Article published by : Nayana Vasudev on Thursday, September 22, 2016 - Viewed 1177 times

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Category : Commercial Property

Best Way To Get Long-Term Returns While Buying A Property



Real estate has been a giant influencer in the investment market in the recent years. With the majority of the population believing that the trend is for the asset price to steadily rise, the affinity to invest in real estate has seen a constant rise. While the expectation for real estate has always been lined with growth, the recent stagnation and a few falls have been a major wake-up call for the investors. Given this scenario, the need to carefully weigh your options before you plunge into investment has presented itself to be of paramount importance.
Real estate sector has been a little sluggish in the past few years, but backed by the government initiatives highlighted this year, it is expected to change direction in 2016. Increase in sales of the properties and reduction in the number of unsold properties are foreseen by the experts.
All said and done, you need to be conscious about two vital things before making an investment if you want to reap the long term returns on the property.

It is important to understand the amount of income that your property will generate and what will be the appreciation on the capital amount that you will be investing. Without having a clear picture of what your return will be when you sell the property and the income you can expect while you own it, it is advisable to not go forward with the investments.

An owner needs to be able to reap profits on the resale value of the property. Without this, the whole exercise of an investment is rendered futile. Same goes for the rental yield. If there is no income potential when the property sits under the ownership of a person, then the investment hold no long-term return capacity.

Keeping track with the trends in the realty sector, an impressive appreciation may be out of the books for fair amount of time in the future; however, you can certainly bank on income generation through rentals. Rental yield can be your significant long term real estate investment plan as rental income is one of the most valued indicators while assessing a property’s investment potential.
An average rental yield of 2-4% is expected and deemed necessary for any property. While certain upscale properties also fetch a good 6%, anything in the before mentioned range is considered a good yield. Also, it is noticed that investments that are reasonable priced gain better returns as compared to their counterparts in the upscale locations.
Deriving from this, if you are looking at real estate investment that will keep you above the ground in the long term, you will need to consider looking at the properties, rental income potential and its capital appreciation in the future.

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Keywords: real estate investment

By: Nayana Vasudev

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Article ID 1031897 (Views 1177)



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