Planning to invest in property? Keep these 4 key factors in mind

When you buy a property, you need sizeable funds and therefore it is important to pick the right one. Although it may appear to be a difficult sector to enter, there is no denying that investing in property has the potential to yield solid returns. Here, choosing the best investment property requires research and planning and if your investment is a success, you could earn passive income. 

According to a report by real estate consultant Anarock, a recovery in property prices and a rise in rental yields have made investing in properties attractive. It said that prices of property have gone up by 6 per cent across the top 7 cities last year. In contrast, property prices in 2021 appreciated by around 4 per cent maximum. Over a period of five years, prices have increased by 11 per cent.

Siddharth Maurya, resource specialist, Expertise Real-Estate and Fund Management, said that a real estate portfolio provides long-term financial growth. 

"After retirement, a future investment strategy will relieve financial stress. As a result, having a long-term strategy is critical," he said.

"Real estate investment is one of the most rapidly growing types of investments because funds invested are spread across multiple sectors," Maurya added.

Given below are 4 key factors to consider before you invest in property:

1. Purpose: The very first thing that one should think about before making a purchase is what he/she wants to get out of it. Identifying the type of property that will help narrow the investment objectives. Choose the appropriate type based on how much profit margin you expect to make.

2. Research: Before entering the market, thorough research is essential. You should assess the current scenario by taking into account several factors like whether house prices are falling or rising, locations performing well in terms of return, property types and more. It is also critical to conduct a thorough background check of the builder.

3. Policies: When purchasing any type of property, whether it be for investment or personal purposes, it is crucial to understand the laws that cover the real estate market. Different locations will always have different laws supervising the buying and selling of properties. Tax values also vary differently from one state to another. This is important to avoid any potential inconveniences that may arise in future.

4. Location: The location is a key aspect as it influences the region's future growth potential. Before buying a residential property, conduct research on the neighbourhood, local markets and other amenities.