Be it angel investors, individual investors, or venture capitalists, investing in real estate tops the priority list of every investor. While the average return on a 10 year investment in the commercial real estate is a little more than 6 percent, investing in the residential real estate, is a little more beneficial as the average return is close to 8 percent. Plus buying a house for sale in Istanbul or any other part of the world is simpler as compared to investing in the commercial real estate. That said, there are some rules of the game you need to follow in order to generate a steady stream of income and achieve your ROI goals. In this post, we bring you some guidelines from the rulebook for investing in the residential real estate. Take a look.
When investing in residential real estate, you cannot afford to overlook the location as it can be the single most important factor that impacts your property’s value in the long run. To find out whether the value of homes in the area has appreciated, study historical data. Take a look at the average monthly rents. Invest in properties that provide easy access to hospitals, schools, and public transportation. Steer clear of properties located in neighborhoods with high crime rates.
Often buyers fall in love with a particular property and strongly believe that they need to buy it, even if the asking price exceeds their budget. This obsession can prove to be a serious financial mistake in the long run. Rather than buying a property just because you like it, run the numbers before taking the final call. If you intend to rent the property, make sure it can fetch at least 1 percent of its sale price as rent. Most importantly, avoid spending too much upfront.
Do not invest in your local market, just because you live there. Instead, look for markets with low unemployment rates. Invest in markets that have experienced steady employment growth during the past few years. Prefer markets with increasing rental rates and a healthy in-migration rate.
To avoid losses, follow these rules when buying a home for sale in Istanbul or any other part of the world. Be realistic about how much you can spend. Prefer buying directly, rather than investing through partnerships or funds.