how to conduct real estate investment analysis

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How To Conduct Real Estate Investment Analysis

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Post on 22-Nov-2014

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Real Estate


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Real Estate Investments require detailed analysis to ensure good future prospects. For this, the investors need to lay emphasis on factors such as price, location and other financial constraints.

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How To Conduct Real Estate Investment

Analysis

 For all Real Estate Investors, it is considered very crucial to carry out the investment analysis. This helps in knowing the profits that can be drawn from a particular property. This can be taken as a crucial step for every real estate investor to analyze the prospects associated to a project. For this, one needs to get into the core of the development whether it is the price, location or rental value that the property can ensure. All these factors are needed to be considered by the investors while searching for the right investment option.

 Conducting an Investment Analysis is important, for which following factors should be considered: -

Basic Details of a Project

This keeps much relevance with the fact that the property is beneficial from investment point of view or not. Under this, the factors like infrastructure, total floor area ratio, number of towers, number of units and area devoted to each unit have to be considered. All these factors make a property that can bring benefits for the buyers as well as investors.

 Financing is a significant thing that decides about the final step to be taken by the investor. Once the investor is clear with all the complexities of the financing part, it gets easier to go ahead for the buying action. For this, he/she needs to check about the total price, booking amount and the payments to be made at different intervals. After this, the amount of loan and all the associated facts should also be cleared out along with the interest rate.

Details Related to Financing

This is a factor that any investor would take care of. If a person is buying a property for investment point of view, this point has to be considered. For this, one should check about the rental income that the property can generate. For this the market analysis has to be done to know the amount that can be drawn with the rental income.

Income that the Property can Generate

The investors need to analyze the expenses associated to the property well in advance. They need to see what are going to be the cost of maintenance, property taxes, insurance along with the extra charges that will be paid every year. By getting a clear idea of the expenses that can the property will bring along, the investor can plan the income that to be expected in the years to come.  .

Assessment of Expenses

After analyzing these factors well, the investors can compare the income and the expenses that the property would be expected to ensure. Once it is done, the investors can know about how much profits can be generated by a property in the coming years. Apart from this, another important factor would be to check the future prospects and the developing taking place nearby. This serves as a crucial factor when it comes to the expected price rise in the years to come. The investors should do research about this so that the money can be invested in the right property.

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