The real estate industry of India is orchestrating an impressive comeback as demand for properties are soaring in many prominent Indian cities. So if you’re wondering what are the risks of real estate investment, we’ve got the answer.
Favourable market conditions, compelling economic sentiments, and lower interest rates further direct the market to a promising position.
A progressed real estate market has also revived the interest of investors. Along with home buyers, investors are also tempted toward the market in vast volumes in pursuit of improved returns.
However, you must be aware that, similar to other financial markets, real estate is not entirely devoid of risk. There are multiple types of risks, such as market, economic, and developer-related risks in the sector. Investors need a conservative risk management strategy setup for safer investments and higher yields.
Here are 5 noteworthy tips that can aid in managing & systematically reducing risk in real estate investment.
If you’re investing in multiple properties, why not invest across regions rather than concentrating in one market. Despite accumulated trends, regional disparities exist in India.
Therefore, investing in multiple regions can alleviate risk and increase ROI. However, prior to investing in various geographies, it is best that you do your research precisely and accumulate insights into past track records of individual locations.
Similar to geographic diversification, you could also consider investing in various assets to relieve market and economic risk. Placing your money across assets such as commercial, residential, warehousing, retail, etc., optimises the overall returns.
This can distribute risk across assets, and limit the overall impact of any possible downtrend in a particular category will.
Analyse The Market
Analysing and observing the market before committing to any substantive investment is crucial. As an investor, you should understand the concept of demand and supply, future trends in the market, potential demand, etc.
Similarly, you must understand the physical infrastructure’s state, upcoming projects in the vicinity, business catchments, business/ IT parks, social infrastructure, etc. A meticulous market analysis can present many beneficial insights to investors like yourself.
Estimate Your Time Horizon
You will require much patience for real estate as it is a tangible asset. Contrasting to the stock market, you should have a medium to long-term period at your disposal to enjoy the fruits of you real estate investment.
If you can maintain the property for an extended period, you can significantly prevent the drawback risk of cyclic pitfalls. Furthermore, you can relieve at the right time. Therefore, it is wise to access the risk appetite and evaluate the planning horizon.
Credibility Check of The Developer
During the previous 5-7 years, the credibility of developers’ has become quite critical. Innumerable examples have demonstrated how projects belonging to non-credible developers get delayed.
Though prominent developers could also fail, choosing a credible name in the industry can diminish the risk to a significant extent. ACE Group is one of the renowned real estate builders in Noida known for delivering property in sector 150 Noida on time as planned.
Similar to the developer’s credibility, it is vital to confirm the functional dimension of the project. This could include utility, design, floor plan, specification, etc. A sound project will entice better investors, buyers, and tenants, yielding better returns.
To know more about ACE Group’s new projects in Noida, contact us on Toll free No : 1800-11-9999