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What Are The Most Important Factors for Real Estate Investing?

What should be considered when investing? Although the location of the property is the key concept, there are many factors to  consider when investing in Real Estate to understand whether the property is ideal for you.

If it is necessary to sort out the factors that are important in Real Estate Investment, the Location (Location), which is the key point, comes to the fore first.

 Location of the Property:

The location in which the property is located has a critical and important role for its value. Proximity to amenities, natural landscapes, and sociological status/status of the neighborhood , green space feature prominently in residential property valuations. In commercial property valuations, proximity to debouches, warehouses, transport hubs, highways and tax-exempt areas plays a complete role in the pricing of property.

When considering the location of the property, the key point is long-term planning and views on how the property area is expected to develop during the investment period. To exemplify, if the backyard of a  quiet residence is transformed into a noisy and dynamic area, a negative impact on the value of the property can be observed. For this reason, the property and lands located in the immediate area of the land to be invested should be taken into account.

For short-term or long-term future planning, which is about the considered Property, the buyer should engage in a dialogue with public organizations responsible for zoning and urban planning.

Evaluation of the property

Real estate valuation ;

Real estate valuation is very important for the financing of the purchase transaction, as well as for the list price, investment research, insurance and taxation, the sequential terms are all based on the Real Estate Assessment.

Evaluation methods in fairly common use include three types of approaches;

*  Sales comparison approach: Recent comparable sales of properties with similar characteristics – it is the most common and convenient approach for both new and old properties.

* Cost approach: The cost of land and construction, minus depreciation- is the approach that is appropriate in pricing for new construction.

* Income approach: It is the most appropriate approach to be used to determine the value of properties that will provide a return on the expected cash return — based on the logic of renting.

 

 Purpose of Investment:

Lack of clarity about the purpose can lead to unexpected consequences, including financial distress, especially if the investment is mortgaged.

Determine which of the main categories listed in the subdivided headings of real estate investment best suits your goals, and then create plans in this direction:

  • Buy and use yourself : It will save on rent; you will have the advantage of self-use, at the same time you will be able to gain value.

* Buy and rent: Provides consistent income and long-term value growth. In situations such as managing tenants, making repairs, handling possible conflicts and legal concerns, the landlord needs to have the right temperament.

* Buy and offer (short term) : The property is under construction when it is purchased and sold at a profit when the property is finished.

* Buy and offer (long-term). This typically focuses on significant long-term intrinsic value appreciation. This provides opportunities to support long-term goals, such as retirement.

 

New Construction and Existing (Old) Property

Modern amenities, attractive pricing and the ability to customize are typically features of new construction.

Delays, higher prices and the unknowns of a newly built area are among the risks of investing in new construction.

 

Existing (old) properties ; has advantages such as ; convenience, faster access, built-in improvements (utilities, landscaping, etc.) . And in most cases they have a lower cost.

 

There are certain important points that the investor should pay attention to when Decisioning between a new construction or an existing property.

 

* It is necessary for the investor to review the past projects of the Construction company and investigate the reputation of the construction company regarding new investments.

* For existing properties, property deeds, recent surveys and valuation reports should be reviewed.

  • It is important to pay attention to monthly maintenance costs, unpaid dues and taxes. In such situations, costs can have a serious positive and negative impact on cash flow.
  • When investing in rented property, it is necessary to know information about whether the property is rent-controlled, rent-stabilized or free market. (The expiration date of the lease term, the availability of renewal options for the tenant, the ownership of the items contained in the apartment, etc.)

* Quality- if items (fixtures, furniture, and equipment) are to be included in the sale, they must be checked.

 

 

1- General Real Estate Market

Similar to other investment strategies, buying low and selling high is a pretty solid strategy. Real estate markets are volatile, so it’s beneficial to stay on top of trends.  Also, it is very important to monitor mortgage rates to reduce your financing fees.

 

It is important for the investor to closely follow the trends and statistics and stay up to date in the Real Estate Market. Housing costs and sales. New constructions and properties, mortgage rates for properties and foreclosures are among the topics that the investor should follow.

The rapid increase in the value of real estate and land plots in Turkey, the great benefit it provides to investors, also attracts the attention of foreign investors. Hometur.net you can learn about the right real estate investment by following.

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