Six things to consider before investing in real estate
12 Feb 2017
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Those planning to invest in real estate must take into consideration several factors in choosing a project. These factors include a profitable location, reputation of the developer, and the analysis of own cashflows or cash in hand to determine if the potential to invest exists, and that in case of an unforeseen situation, monetary crisis will not occur. The factors to consider are:
1. Adequate saving to cover emergency situations. The savings should be able to cover expenses over 3-6 months.
2. Beware of past problems in regards to bank loans in the credit history. Generally, before a financial institution approves a loan, the application must pass through the credit bureau score analysis that basically delves into the history of loan payments of the applicant.
3. The debt burden must be carefully considered, before deciding to buy real estate. For problem-free approval of a loan, the total monthly debt burden should not exceed 40 percent of income.
4. Carefully inspect the project and the unit during the transfer process and note any discrepancies not mentioned in the contract.
5. The developer is important. Consider to invest in a project constructed by a respected and experienced developer who is already well-known in the condominium development business. With this consideration, the contract is likely to be fully honoured.
6. Other factors such as the quality of life, the society and living environment, size and quality of the project, effective project management are all important in the consideration for such a long-term investment.
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