Buying Property: A Long Tenure Financial Commitment

SkyscrapersMany financial experts and advisors recommend investment as an effective route for financial growth. There are two main categories that most, if not all, investments fit into, short and long term. Any investment can be either short term, where an item, stock, or plot is purchased then sold after a few months for a profit, or long-term, whatever was purchased is held for a number of years and maybe even decades. Both types of investment have their advantages and disadvantages. Short term can net you some quick cash, and if you know how to play the market right, you can make quite a good deal of money by constantly buying and selling multiple investments. However, short term gains are usually taxed more compared to long term gains. Long term gains are considered a much safer option with a steady growth rate (normally). Though that steady growth can develop into quite a large ROI (Return on Investment), it takes years for it to get to that point, years that you don’t have that money.

Long term investments are excellent when used for saving for retirement or other far-off eventualities. If you start getting your hands on long term investments at a young age, you can save up quite a good deal of capital gain for use when you have a family. But long term investments are also commitments. By buying into one, you are committing to holding on to that for quite some time. Selling early can be disadvantageous as well, with the potential for a net loss a real possibility. 

Regardless, buying into a long term investment is an excellent idea. And according to Business Today, the time to buy couldn’t be better as property prices have been appreciating over the past half-decade and the rupee has been dropping in value compared to the US dollar. So investing in long term property in India is much easier for those out of country Indians and other foreign investors. 

Type of Property and Location

When looking for the most effective long term investment property, you have to first decide what kind of property you want to buy and from where. The two main property type categories are commercial and residential. Each type has particular nuances that need to be worked around, but those are details for another time. Realty Times says that the range of different available property in India today has been constantly increasing. So there isn’t a lack of choice

Once you’ve settled on what kind of property you want, you next need to start scouting locations and learning the subtleties of the area you want to buy in. Just as it has always been, location is incredibly important when determining the value of a property. Ramesh Nair, the COO of real estate investment management company Jones Lang LaSalle told The Economic Times, “Investors need to establish the soundness of the location and its demand/supply dynamics. If they do not engage in sufficient research, they may end up buying into micro markets, which have or will have high vacancies.” Be careful where you buy and do your research, otherwise you’ll lose money and be unable to easily sell your failed investment property.

Variety is The Spice of Life

If you go all out and spend every rupee you have on a single investment, you’re almost setting yourself up for failure. Of course, if the investment is solid and grows, you can make a lot of money. But if it fails, then you lose everything. One of the best ways to keep your risk as low as possible is through spreading out your investments across multiple properties, markets, and locations. 

According to Nirrtigo, buying property, either residential or commercial, and renting it out is a great way to keep a steady flow of money coming while providing a level of security for your investment. Combining strategies like that with other property purchases are an excellent way to spread out your investment and reduce risk. 

Watching the Market

Fluctuation is pretty much a natural phenomenon when it comes to economies and markets. And it’s also something you need to keep a close eye on. The prices on property and the like in your area will change and shift just as much as they will wherever your investment property is. To ensure your investment is as efficient as possible, you need to monitor the local markets on a regular basis. Examining price trends and other financial changes in the locale can give you the information necessary to make educated guesses and estimates about where that particular market is going. Doing this can help you predict whether continuing to hold on to your long term property investment is worth it or whether you should sell before something terrible happens. Real estate companies like Unitech Group are great sites to visit to get an idea of what property is available and for what price in numerous locations.