Challenges of investing in Real Estate and How to Face them

Purchasing a home to live in or as an investment for future security is the most promising and popular path to monetary growth of an individual. Several factors and processes are set in place for the process. Despite that, we tend to face a few repetitive and common challenges while making this important purchase. Here is a look at some of those Challenges in Real Estate Investment and how to overcome them.

Challenges

  • Chasing the Highest Returns

While there may be nothing wrong with looking for properties that promise to yield more returns at a faster rate, this mindset may cause one to overlook other factors that determine the quality of the estate in question. As a general rule, risk returns are usually derived from high risk purchases. Contrary to this, there must be a balance between risk returns and the level of risk you are partaking while purchasing a property.​

  • Waiting for Unrealistic Properties

On one of the sides of the real estate market equation are investors looking for the perfect investment property to crop up. The perfect investment opportunity is extremely rare in the tight housing market, and there is the concern of waiting too long and blocking your funds in the meantime. ​

  • Buying at the wrong time

In real estate, it is all about timing. The problem with timings is that there is no person or online source promising you the best time and returns on a property. Taking help from a real estate veteran or professionals will spare you the burden of poor investments and regrets on the location of your purchase. ​

Buying-Property-at-Wrong-Time

  • Taxes

Rental property owners tend to get hit with hefty annual property taxes as well as income taxes on any profit derived from the said purchase. Another part of the research is also evaluating all costs. It is easiest to look at the RoI, however correct evaluation of costs is what will ensure a sound investment.​

  • Maintenance of the Property

Houses and rental properties have to pass an inspection before being bought and sold. But even when all factors are considered and taken care of , there is always the problem of problems uncalled for. Natural causes, sudden external factors like political and social situations translate to heavy maintenance cost for the owner, being exposed to big capital outlays for new windows, a new roof or even just simple weekly or monthly property maintenance. ​

  • Regulatory Bodies of the City

While landlords must abide by a long list of rules and standards in order to stay compliant with local regulations, the regulatory body like the PMC in Pune city will require a decent amount of procedures and transactions before the process is over, which is taxing to say the least. Non-compliance opens up rental property owners to extra fines and penalties.​

Solutions

  • Online Platforms

Research is key before undertaking any heavy asset purchase. Fortunately for us nowadays, online platforms like Quora, 99acres and magicbricks, there is no shortage of content and information to consume before launching into investing in a property of your own. These platforms are the Pandora’s Box of knowledge on commercial as well as residential projects in and around cities and how to be smart about the purchases one makes.

  • Social Media Platforms

Surprisingly yet unsurprisingly in these days, social media offers more knowledge and insights that one would imagine. Various blogs of investors, as well as real estate properties who take to dynamic platforms like Twitter and Instagram to market their advantages can be a crucial crutch in making important real estate decisions for the younger generations.

Social-Media-For-DEcision-Making

  • Digitized Government Procedures

Government procedures, while essential to the process of investments, can be tedious and the most complex part of investing in large assets, like properties. These procedures can be made simpler through digitization of all tasks like online forms and payments. This way, all actions can also be permanently recorded with the Government of the country for future references.

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  1. Pingback: Should you Buy or Lease a Commercial Property? - An Expert's Guide

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