For most of the people, the goal behind purchasing a property is an investment to generate profit. However, there can be instances where you might buy a property without considering all factors involved and without calculating the full cost. And when you do this, you may not get the returns you wanted, or make a loss in the worst-case scenarios.
To make sure that you don’t make any sort of losses while selling the property, here are the five mistakes you must avoid while investing in the realty sector.
1. Not knowing about the credit score
If you are applying for a loan to buy a property, the lender would investigate your credit history. Any case of default in your credit history may lead to rejection of the loan application or it might get approved at a higher rate of interest.
2. Not weighing full cost of real estate investment
When you invest in real estate, you must calculate the full cost of investment. For instance, on a base price of Rs 1 lakh, your additional charges of homeownership include GST, registration, stamp duty, brokerage, furnishing, costs of borrowing etc. that can easily pull the overall budget to 1.3 or 1.5 lakh.
3. Impulse buying
A buyer must analyse at least 10 properties before making the final decision. Often, any unethical broker influenced by commission might refer you to an inappropriate property.
4. Doing due diligence before paying
A good property purchase is always the result of great research on several different variables. When it comes to developers, sticking with good names is a great way of de-risking the proposition. A buyer must check the neighborhood infrastructure and decide if it is adequate for the family’s needs.
5. Not comparing with other forms of investment
Purely in terms of investment, it’s much easier and cheaper to invest in other financial instruments such as mutual funds, small savings, or equity.