Real Estate investment is one of the lucrative investments today because of the continued increase in property values. It is a huge industry in India with the real estate market being worth $30 billion as of now. There are many ways to make money out of your real estate investment such as selling the property, renting it or buying a new one. In this article, I am going to share with you some simple ways to know how much money your investing.
If you are looking for an investment in real estate, you need to understand certain factors which can help you decide the profit margin and the returns that you can get from your investment. Real estate is basically property consisting of the buildings and land on it, and its underlying natural resources like water, minerals or vegetation; immovable land of this kind; an absolute interest vested on the said immovable property, buildings or other housing in general. Economic characteristics of a place determine the value of the property that a person is going to buy. Economic attributes include location (where the place is located), accessibility (whether it is easy to get to by public or not) and taxability (whether the place is subject to taxation or not). In addition to these characteristics, the land that is being invested in also determines the overall economic characteristics of the place.
There are many factors that determine the value of a real property and its overall profit potential, these include the amount of time and effort necessary to maintain the structure, the utility and maintenance expenses involved, the proximity of the structure to the resources, and whether or not natural resources exist within the vicinity. In case the land that you want to invest is not permanently attached to any natural resource or other permanent structure, then its value would also be dependent on the capital gains tax that one is liable to pay, as well as the capital gains tax that one is liable to pay if they sell their old real estate property. Permanent attached properties usually sell for a lower price than those that are not permanently attached. Permanent attached properties are usually developed land that is permanently attached to the property. These properties are sold when the former owner is unable to pay the taxes on his land, and needs to shift into another state or country.
Natural resources are the ones that are really important when investing in real estate. These resources are ones that can’t be reproduced, and are not replaceable. Some of these resources include water, coal, oil, gas, and forests. Water and energy are the two major natural assets that are used widely, and both of these are very expensive. If you want to invest in a real estate that’s located in a good area where there is a lot of water or energy, then you should consider buying a water front property or an oil refinery. The location of the land and its proximity to water frontage or natural resource deposits greatly affects the value of the real estate that it houses.
Whether natural or man made, man-made enhancements always affect the value of real estate, so you should always check whether natural or man-made improvements were made to the property before buying it. There are certain improvements that cannot be patented; such as enhancements that were done to the building itself, like installing heating and cooling systems, installing windows and doors, etc. Before you buy any real estate, you should also check whether there have been any recent additions to the property.
A lot of people consider a piece of land to be worthless if there are no structures on the said piece of land. However, some people don’t see the necessity of having buildings on their property if they can’t afford to buy a house there. So, it all depends on your personal preference as to what kind of buildings you want to build on the property. Usually, man-made structures are constructed faster than natural ones, and they are also cheaper to build. Therefore, natural properties will usually cost more than man-made ones when investing in real estate.