An investment should be a source of income for you. A backup plan in case your regular job fails. Investment is something to save you. When it comes to real estate, the rules of investing do apply. You can’t just assume it’s safe without knowledge. That is why before you invest, you sit back and plan.
Moreover, a lot of wealthy investors will tell you that they didn’t get the money without losing first. Losing is part of the winning game. However, you need to lose smart by knowing the project that will turn your losses into money.
Real estate investing involves a few things:
The property
What kind of property determines your returns? A rental apartment of 150 units will offer you better income than 50 units. The 50 units’ apartment may be safer if the project does go under but the 150 units will have massive returns. All you need to do is be smart about it. Choose a property that will have bigger returns. Besides, smart businessmen take heavy risks.
The location
Where is the project located? Many people buy houses or rent for the location especially if the environment is great. Working Kenyans want homes that are close to work but away from the city noise. Hence, when choosing an investment property you need to research on trendy neighbourhoods. Or start the trend.
A project may be amazing and saves you money but if the location is off, people won’t buy into it.
The interest rates
What percentage will you get? If you are depositing 10% into the project you need to be assured it will double if not triple. Investment means you are getting more money than you put in.
Sit down with the developers and have a clear account of the rates. The big question should be whether they will return it as 100% or just 10%.
See also: How Real Estate can boost your Retirement plan
By now most of you are aware that Real Estate is a lucrative business, just take a look at the huge amount of scammers out there. An industry with a lot of revenue attracts counterfeits.
If you are not investing, you can start now. Kenya homes will guide you.
Research about Real Estate
Here is where you’ll gather all important information before jumping into your first investment. You’ll need to learn how to evaluate residential and commercial real estate properties. This will include identifying and mitigating risks for safer investments with higher pay-outs.
Look into success stories
Ask your friend John how his investment worked out, was it successful or not? You need to go around and ask real estate investors how they managed not to fail at investing. Noted down how they evaluate commercial deals across a wide range of asset types. These notes will help you make smart decisions.
Analysis the Kenyan real estate market
There is a lot of information about real estate in Kenya. From the bad to the good, you need to be aware of all of them. Additionally, you will have to find out what rental properties are looking for investors or even commercial properties like malls.
Looking to Buy then sell
This is if you are hunting for a short-term investment. You find a property that is foreclosure or needs repairs, buy it for a lower price, fix it up then find a buyer to purchase it. You need to analyse the deals, look into the repairs, who owned the property and the value it will give back after the sale.
How to choose a partner
Furthermore, if you are looking to partner up there are several things to put in consideration. You need to know how fairly divide up profits and amount of work. Additionally, who will be going to the site and so on? This will make sure everyone has a fair share
Related: Investing in Real Estate: A Goldmine of Riches
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