When it comes to profitable investment, property is still one of the most lucrative avenues. Profitability is not a given, however – investment property must make sense from a returns-on-investment point of view. In that respect, one must pick from available options carefully.
To judge whether investment property will deliver the goods in the long run, one must consider many variables. Paying attention to these will maximize resale value in the future. However, the first aspect to factor in while buying an investment property is location. Location, as professionals know, is the most decisive factor in property investment.
What makes the perfect location? One should not judge only by the actual site of the investment property, or even its cost. Land and property rates differ from area to area, and this is an important consideration as far as the resale value of an investment property is concerned.
The general state of the locality is important in terms of overall investment value. Next, proximity to major highways and roads is desirable for investment property, because ease of travel and supply of essentialities adds to a property’s value. The ideal location for a residential investment property would be somewhere towards the centre of the residential neighbourhood, where large vehicles do not have access.
While judging the locality of a residential investment property, the existence of proper communal infrastructure should be ascertained. Facilities such as shopping and grocery outlets, schools, public transport, medical facilities and means of entertainment should be close at hand.
The worth of a constructed residential property is not decided merely on the basis of land value, but also on the surrounding infrastructure that adds to the value of a location. The value of an investment property will appreciate over the years only because of the overall conveniences the property and its location will provide to future buyers.
For a commercial investment property, proximity or ready access to local business hubs works best. The existing mix of business occupiers plays a vital role, as does the presence of business-centric facilities such as telecommunication services, a post office, public transport, etc. A commercial investment property that is also close to a residential hub is ideal, since this means that there is balanced real estate market growth in the locality.
While buying an investment property, one should remember that property investment should be based on long-term profitability objectives. Speculative property investment harms the sector and can often lead to personal financial loss, especially if one has not judged the market properly.
(The writer is CMD, Amit Enterprises Housing)