Investment in real estate is considered one of the hardest areas. Therefore, if you want to step into this dangerous field, you need to equip the necessary knowledge, avoid real estate investment by the movement.
Note high liquidity, legal certainty
Whether you are investing in real estate in the central or suburban, residential or agricultural, apartment or townhouse, even investing in villas, the criteria first need attention is the bar clause. The liquidity of the project can be simply understood as the ability to convert into cash from that project.
Assuming that after you have completed your purchase, try asking the question: If now, if you sell this property, is there a buyer right now? The answer may not be. Even if you need money, you are willing to lower the price of the product, so you buy right now? The answer may still be no.
You can buy it easily, but to sell it is another matter. In particular, if you are intending to borrow money from a bank or acquaintance to invest, it may take a long time to generate revenue. Then you will be impatient because the property does not raise prices, sell no buyers and pay interest every month.
Tips for investing in real estate
Real estate not too far from the center in about 3 – 10km will usually have good liquidity. The reason for this is that people will often accept moving with this distance, this radius, the customer will only take 10 – 25 minute moves. That is the real consumer demand.
When it comes to real estate, there are usually two basic needs: consumption and investment. When the market tends to go down, investment demand can disappear and only consumer demand. If your property is not too far away, even if the market goes down, you still have the right to sell your real estate products, exit the market.
Many people lose money or have accumulated billions of billions because of the fact that buying real estate is too far away from the center where there is no demand for consumption. Some other properties are too expensive to meet the needs of many people so the market down will also lose the liquidity.
So, the question you need to ask yourself first is: If I need money and sell immediately, who will buy it? Or say that the liquidity of this property is high or not? Besides the liquidity side, legal factors are also particularly important. Need to find out whether this land is in the planning or clearing land clearance. Currently, there are many projects being implemented in the country, ground clearance to build roads, markets, schools, …
In fact, the house is still in the planning are still traded and red book name. However, the economic damage to real estate investors is certain to exist. You need to remember to check the legal information, property by asking the ward, commune, district resources … before the transaction.
Focus on cash flow, capital gain of real estate
If you have bought real estate, built a house and rented it immediately, that place is called cash flow. If the property you own right near the school, hospital … you can carry out business and make money right away, where it is called cash flow. In contrast, there are many places where you buy finished, built for rent but no one to hire or business, where it will be called no cash flow.
The capital gain factor can be simply understood as an estimate of the potential increase in real estate prices. There are real estate you buy price approximately 40 – 45 million m2 and after only 3 – 7 years, the increase or decrease is not significant, such as increased from 45 to 50 million/ sqm. There are other real estate, buy at the level of 3-10 million / sqm, after 3 – 7 years, the increase is 5 to 6 times higher than the original (20 – 50 million/ sqm).
Another factor is that with the developed areas, the price of real estate is usually relatively stable. So in the developing areas, real estate continues to enjoy capital gains, now your question is where to buy?
If you choose the wrong one, your money will not be proliferated. If an asset that can not generate cash flow is considered a business failure, or it is called “property death, cash flow”. Many properties in the inner city no longer have high capital interest or vice versa, while many assets far from the center have no cash flow element. You are a real estate investor, if you want to succeed, you certainly need to grasp these factors, both to avoid the investment is not favorable, while avoiding the risk of legal.
Lastly, do not forget to invest in expertise when investing in real estate. Whatever your field of work, you should study relevant information and expertise, learn about the real market, and be able to observe a keen, well-grounded mind.
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